The model was entered into an Excel spreadsheet and the table below shows the answer report in its entirety. Show how the profit is calculated
Objective Cell (Max)
Cell Name Original Value Final Value
$F$4 Profit $5,638.13 $22,018.33
Variable Cells
Cell Name Original Value Final Value Integer
$C$3 P1_ $10.00 $45.57 Contin
$D$3 P2_ $10.00 $51.50 Contin
$E$3 P3_ $10.00 $58.89 Contin
Constraints
Cell Name Cell Value Formula Status Slack
$F$8 Lawyers 1358.91 $F$8<=$I$8 Not Binding 3641.09
$F$9 Guns 2573.03 $F$9<=$I$9 Not Binding 7426.97
$F$10 Money 2523.94 $F$10<=$I$10 Not Binding 12476.06
Answer: The profit is a function of quantity sold and price, with the quantity sold a function of price.
The X1 product has a demand of 200 - 2.25 × 45.57 = 97
The X2 product has a demand of 300 - 3 × 51.50 = 146
The X3 product has a demand of 400 - 3.5 × 58.89 = 194
The profit per X1 is $45.57 - 2.25 = $43.32
The profit per X2 is $51.50 - 3 = $48.50
The profit per X3 is $58.89 - 3.5 = $55.39
So 97 × $43.32 + 146 × $48.50 + 194 × 55.39 = $22,018.33
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