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ABC, Inc. produces two lines of heavy equipment. One of these product lines, termed earthmoving equipment, is essentially for construction applications. The other line, termed forestry equipment, is destined for the lumber industry. The largest member of the earthmoving equipment line (the E-9) and the largest member of the forestry equipment line (the F-9) are produced in the same departments and with the same equipment.

Using economic forecasts for the next month, ABC’s marketing manager has judged that during that period it will be possible to sell as many E-9’s or F-9’s as the firm can produce. Management must now determine a production plan, with a goal of maximizing profit.

Case 2.2 ABC practice