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Jan 29, 2022

You have been called in as a consultant to a company that has just bought a factory that manufactures widgets. You will write a report advising the company on how to pitch the monthly level of production so as to maximize its monthly profit.

The factory has provided the following information:

  1. Monthly production cannot exceed 20,000
  2. There are fixed costs (rent, power, wages, etc.) per month of e125,000.
  3. The total costs per month at maximum capacity (20,000 widgets) amount to e445,000.
  4. There is some historical data relating the sale price per unit to the demand per month:

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