J.A Computers is a small manufacturer of personal computers. It concentrates
production on three models – a Desktop 386, a Desktop 286, and a Laptop
486, each containing one CPU Chip. Due to its limited assembly facilities J.A
computers are unable to produce more than 500 desktop models or more than
250 Laptop models per month. It has one hundred and twenty 80386 chips
(these are used in Desktop – 386 model requires five hours of production time,
the Desktop 286 model requires four hours of production time, the Laptop 486
requires three hours of production time. J.A Computers have 2000 hours of
production time available for the coming month. The company estimates that
the profit on a Desktop 386 is Sh. 5,000, for a Desktop 286 the profit is Sh.
3,400 and Sh. 3,000 profit for a Laptop 486.
Required:
Formulate this problem as a profit maximization problem and mention the
basic assumptions that are inherent in such models.