Company TKK Corporation, a large conglomerate, has three subsidiaries engaged in producing raw rubber, manufacturing tires, and manufacturing other rubber-based goods. The production of 1 unit of raw rubber requires the consumption of 0.08 unit of rubber, 0.05 unit of tires, and 0.02 unit of other rubber-based goods. To produce 1 unit of tires requires 0.5 unit of raw rubber, 0.09 unit of tires, and 0 units of other rubber-based goods. To produce 1 unit of other rubber-based goods requires 0.2 unit of raw rubber, 0.01 unit of tires, and 0.07 unit of other rubber-based goods. Market research indicates that the demand for the following year will be $400 million for raw rubber, $800 million for tires, and $180 million for other rubber-based products. Suppose the demand for raw rubber

Question

increases by 10%, the demand for tires increases by 20%, and the demand for other rubber-based products decreases by 10%. Find the level of production for each subsidiary in order to satisfy this demand. Round the answers to the nearest tenth, if necessary.

a. $198.5 million worth of raw rubber
$1,129.7 million worth of tires
$1,119.2 million worth of other rubber-based goods
b. $1,119.2 million worth of raw rubber
$1,129.7 million worth of tires
$198.5 million worth of other rubber-based goods
c. $689.7 million worth of raw rubber
$159.2 million worth of tires
$36.5 million worth of other rubber-based goods
d. $440 million worth of raw rubber
$960 million worth of tires
$162 million worth of other rubber-based goods
e. $1,138.6 million worth of raw rubber
$1,120.1 million worth of tires
$237.4 million worth of other rubber-based goods

Answer 1

e. $1,138.6 million worth of raw rubber
$1,120.1 million worth of tires
$237.4 million worth of other rubber-based goods