A Company Is Developing Its Weekly Production Plan

Multiple Choice

A company is developing its weekly production plan. The company produces two products, A and B, which are processed in two departments. Setting up each batch of A requires $60 of labor while setting up a batch of B costs $80. Each unit of A generates a profit of $17 while a unit of B earns a profit of $21. The company can sell all the units it produces. The data for the problem are summarized below. ​ The decision variables are defined as
X_i = the amount of product i produced
Y_i = 1 if X_i > 0 and 0 if X_i = 0
Using the approach discussed in the text, what is the appropriate value for M₁ in the linking constraint for product A?

A) 2
B) 3
C) 16
D) 12