JKL Boat works is planning to manufacture three types of molded fiberglass recreational boats a…

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JKL Boat works is planning to manufacture three types of molded fiberglass recreational boats a fishing (bass) boat, a ski boat, and a small speed boat. The estimated selling price and variable cost for each type of boat are summarized in the following table:

Boat

Variable Cost

Selling Price

Sodere

#12,500

# 23,000

Tana

8,500

18,000

Awash

13,700

26,000

The company has incurred fixed costs of #2,800,000 to set up its manufacturing operation and begin production. JKL has also entered into agreements with several boat dealers in Ethiopia to provide a minimum of 70 Sodere boats, 50 Tana boats, and 50 Awash boats. Alternatively, the company is unsure of what actual demand will be, so it has decided to limit production to no more than 120 of any one boat. The company wants to determine the number of boats that it must sell to break even while minimizing its total variable cost.

Required: Formulate a linear programming model for this problem.JKL Boat works is planning to manufacture three types of molded fiberglass recreational boats a fishing (bass) boat, a ski boat, and a small speed boat. The estimated selling price and variable cost for each type of boat are summarized in the following table:

Boat

Variable Cost

Selling Price

Sodere

#12,500

# 23,000

Tana

8,500

18,000

Awash

13,700

26,000

The company has incurred fixed costs of #2,800,000 to set up its manufacturing operation and begin production. JKL has also entered into agreements with several boat dealers in Ethiopia to provide a minimum of 70 Sodere boats, 50 Tana boats, and 50 Awash boats. Alternatively, the company is unsure of what actual demand will be, so it has decided to limit production to no more than 120 of any one boat. The company wants to determine the number of boats that it must sell to break even while minimizing its total variable cost.

Required: Formulate a linear programming model for this problem.

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