Optimization （Behavioral Economics and Decision Making）

Crimson Greeting Cards (motto: “Hahk the cahds in Hahvahd Yahd”) makes and sells two types of greeting cards:

• Kid Cards (K) have single folds, multi-color printing, and chips with audio recordings
• Grandma Cards (G) have double folds, 1-color printing, and added glitter

Both types of cards are printed on the same printing press and folded on the same folding machine

• CGC’s production constraints are as follows:
  • The printing press can produce a maximum of 700,000 K cards or 800,000 G cards per month
  • The paper folding machine can produce a maximum of 1,000,000 K or 500,000 G per month
  • The chip insertion machine (used only for K) can produce a maximum of 600,000 K per month
  • The glitter machine (used only for G) can produce a maximum of 400,000 G per month
• CGC’s production constraints are as follows:
  • The profit contributions of the two products (wholesale prices less materials costs, and labor costs) are $1.50 for K and $2.00 for G

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