Optimal product mix via limiting resource allocation

Steps:

• Identify the limiting resource (e.g., machine hours) and contribution margins per unit for X, Y, Z.
• Rank products by contribution per limiting resource unit (highest first).
• Allocate the total available resource to highest-ranked product until capacity is filled, then next, and so on.
• Calculate units: maximize X at 1000 (full capacity), then Y at 500, leaving resource for Z at 625.

Why C is correct:

• It maximizes total contribution by prioritizing products with highest margin per machine hour, per linear programming principles.

Why the others are wrong:

• A underproduces X, reducing overall profit.
• B underproduces Y, ignoring its high ranking.
• D overproduces Z, wasting resource on lower-margin product.

Not enough information: Full data on contributions and constraints needed for precise verification.

Final answer: C