Universidad Europea de Madrid

Business Mathematics

Optimization

1. A blacksmith wants to make and then sell touring and mountain bicycles using 80Kg
of steel and 120Kg, to get the maximum benefit he wants to sell each bike at the price
200 euros and 150 euros respectively. For the touring bike he will use 1Kg of steel and
3Kg of aluminum, and for the mountain bike 2Kg of both metals. How many touring and
mountain bikes will he sell?

2. A special Barcelona-Madrid train offers preferential seats at the price of 100 euros and
tourists at 60 euros. The preferred person is allowed to carry 50Kg of weight and the
tourist 20Kg. If the train has 90 seats and allows luggage of up to 3,000Kg, what should
be the company's offer of seats for each type of passenger, in order to optimize the benefit?

3. A person wins 10 million euros in a lottery and is advised to invest it in two types of
shares: A and B. Type A has more risk but produces a profit of 10%. Type B is safer but
produces only 7% annually. After several deliberations the person decides to invest a
maximum of 6 million in the purchase of shares A and, at least, 2 million in the purchase
of shares B. In addition, he decides that the investment in A is, at least, equal to what
invested in B. How should he invest 10 million so that the annual profit is maximum?

4. A student dedicates part of his time to distributing advertising propaganda. Company

5. A merchant goes to the local market to buy fish with 5000 euros. They offer two
types of fish: one from a farm at 5 euros per Kg and another at 8 euros per Kg. Knowing
that his truck has space to transport only 700Kg. at most and he plans to sell of the first
type at 6 euros per Kg and the second type at 9 euros per Kg, answer justifying the
answers:
a) How many kilos of fish of each type should he buy to obtain maximum benefit?
b) What will that maximum benefit be?
6. The production function of a company is 𝑄(𝑥1 , 𝑥2 ) = 2𝑥1 + 𝑥2 + 2, where 𝑥1 and 𝑥2
are the units used of each productive factor and 𝑄(𝑥1 , 𝑥2 ) is the units produced. The total
cost function is 𝐶(𝑥1 , 𝑥2 ) = 𝑥12 + 𝑥22 . Determine the quantities of factors with which
minimize the cost of producing 27 units of product.

7. A company manufactures two products that it sells in the market at prices 𝑝1 = 30 and
𝑝2 = 50. Its total cost function is:
𝑥2
𝐶(𝑥, 𝑦) = − 𝑥 + 𝑦 2 − 4𝑦 + 𝑥𝑦
2
Being 𝑥 and 𝑦 the units produced of each product. Find the quantities to be manufactured
to maximize the profit if a total of 30 units are manufactured.

8. Two products A and B are manufactured in quantities 𝑥 and 𝑦 respectively. For the sale
of each unit of A you get 3 euros and for each unit of B you get 4 euros. The production
of the company must adapt to the restriction given by the equation 9𝑥 2 + 4𝑦 2 = 18000.
Calculate the units that must be produced of units A and B to maximize income.

9. A factory produces items 𝑋1 and 𝑋2. The cost function is 𝐶(𝑞1 , 𝑞2 ) = 𝑞12 + 𝑞22 − 𝑞1
and you want minimize this. Determine the minimum cost and quantities to be produced
if the total number of items must be 8.

10. The utility function is 𝑈(𝑞1 , 𝑞2 ) = 10𝑞1 + 27𝑞2 − 4𝑞1 𝑞2 . If the budget constraint is
2𝑞1 + 3𝑞2 = 18, find the quantities that maximize utility.

11. The production 𝑃(𝑥, 𝑦) as a function of the quantities 𝑥 and 𝑦 of two input X and Y
is given by 𝑃(𝑥, 𝑦) = 𝑥 2 + 5𝑥𝑦 − 4𝑦 2 . Find the quantities that maximize production and
the value of this if 2𝑥 + 3𝑦 = 74.

12. If the joint production function is 𝑥(𝑞1 , 𝑞2 ) = 𝑞12 + 𝑞22 and the sales prices are 𝑝1 =
20 and 𝑝2 = 10, is requested:
a) Find the maximum income if the amount of input must be 𝑥(𝑞1 , 𝑞2 ) = 500.
b) Find the minimum amount of input 𝑥(𝑞1 , 𝑞2 ) that provides an income of 1500
monetary units.

13. A company produces two items A and B through a joint production system,
its cost function being 𝐶(𝑞1 , 𝑞2 ) = 𝑞12 + 𝑞2 (2𝑞2 + 𝑞1 ), where 𝑞1 and 𝑞2 are the quantities
of A and B respectively.
a) If both products must total 8 units, determine the quantities of each one of them
that minimize the cost.
b) Without solving the problem again, estimate what the minimum cost would be if
the company incurs in an availability of 2 more units of product.

14. A publisher has been allocated 60,000 euros to invest in the development and
promotion of a new book. It is calculated that if 𝑥 thousands of euros are spent on
development and 𝑦 thousands of euros on promotion will sell approximately 𝑓(𝑥, 𝑦) =
3
20𝑥 ( ⁄2) 𝑦 copies of the book. How much money should the editor allocate to
development and how much to promotion to maximize sales?
15. A consumer has 600 euros to spend on two items, the first of which has a value 20
euros per unit and the second 30 euros per unit. If the utility obtained by the consumer of
𝑥 units of the first article and 𝑦 units of the second is given by 𝑓(𝑥, 𝑦) = 20𝑥 0.6 𝑦 0.4 . How
many units of each item should the consumer buy to maximize utility?