Island Publishing Company publishes two types of magazines on a monthly basis: magazine A and magazine B.
Magazine A generates $0.50 per magazine in revenue, Magazine A costs $0.10 per magazine to produce
Magazine B generates $0.75 per magazine in revenue, Magazine B costs $0.30 per magazine to produce
The publishing company has a printing budget of $4000 per month.
There is enough rack space to distribute at most 20,000 magazines each month.
Island Publishing promises to distribute at least 6,000 copies of each magazine.
The company wants to determine the number of copies of each magazine it should print each month in order to maximize advertising revenue.
(You are not allowed to use optimization software for solving this question.)
a) Formulate a linear programming model for this problem.
b) Solve this model by using graphical analysis. Draw at least three isorevenue lines to determine the optimal solution.
c) The coordinates of all extreme points. Calculate the profit at the extreme points and validate the solution you found in part b.
d) Determine the sensitivity range for the advertising revenue per magazine generated by the real estate guides using sensitivity analysis.
e) Determine the sensitivity range for the printing budget using sensitivity analysis.
f) Determine the sensitivity range for the minimum number of real estate guide requirement using sensitivity analysis.