The Primo Insurance Company is introducing two new product lines: special risk insurance and mortgages. The expected profit is $2 per unit on special risk insurance and $5 per unit on mortgages. Management wishes to establish sales quotas for the new product lines to maximize total expected profit. The work requirements are as follows: Working-Hours per Unit
Working-Hours
Department Special risk Mortage Available
Underwriting 3 2 2,400
Administration 0 1 800
Claims 2 0 1,200
A. Formulate a linear programming model for this problem.
B. Use the graphical method to solve this problem.
C. Verify the exact value of your optimal solution from part (B) by solving algebraically forthe simultaneous solution of the relevant two equations

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?