Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total cost
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Answer :
Some answers are attached below
Explanation:
a) Based on the information provided, below are the all possible sensible patterns the lumberyard may use to cut the 10-ft boards -
Pattern Number 3-ft boards 4-ft boards 5-ft boards Waste (<3-ft)
1 3 0 0 1
2 2 1 0 0
3 1 0 1 2
4 0 1 1 1
5 0 2 0 2
6 0 0 2 0
b) ILP Formulation
Objective Function
Minimize Number of 10 ft-boards to be cut
Z = x1+x2+x3+x4+x5+x6 where xi is the number of boards for pattern i
subject to constraints -
3x1+2x2+x3>=90 ----> 3-ft boards
x2+x4+2x5>=60 ----->4-ft boards
x3+x4+2x6>=60 ----->5-ft boards
Xi>=0 ---->Non-negativity constraint
Below is the excel solver formulation and solution -
The optimal number of Pattern 1,5,6 =0, Pattern 2,3 and 4 = 30
The minimum number of 10 ft-boards to be cut = 90
