Bus Econ 4.3.19

Customers buy 15units of regular beer and 16 units of light beer monthly. The brewery decides to produce extra beer, beyond that needed to satisfy the customers. The cost per unit of regular beer is $32,000 and the cost per unit of light beer is $45,000. Every unit of regular beer brings in $250,000 in revenue, while every unit of light beer brings in $500,000 in revenue. The brewery wants at least $25,000,000 in revenue. At least 51 additional units of beer can be sold. Complete parts (a) and (b).

(a) How much of each type of beer should be made so as to minimize total production costs?

Let y1 represent units of regular beer and y2 represent units of light beer. Find the objective function, w, used to minimize production costs.

w= 32,000y1+45,000y2

SHOW SOLUTION PLEASE