LEASE/BUY. Schick Industries needs to replace some of its aging equipment that produces molded frames for its best-selling Schick racing cycle. Schick can lease machines with a rated capacity of...

LEASE/BUY. Schick Industries needs to replace some of its aging equipment that produces molded frames for its best-selling Schick racing cycle. Schick can lease machines with a rated capacity of 2 0 0 0 frames per month for $3000 monthly. Alternatively, it can purchase smaller machines with a rated capacity of 800 frames per month for $1 0 , 0 0 0 down and $ 1 0 0 0 monthly.

Schick only has $50,000 available to purchase machines now, which limits the number of machines that it could purchase to five. Schick must produce at least 1 0 , 0 0 0 frames per month to keep up with customer demand.

 a. Formulate and solve a linear program for Schick to minimize its total monthly payments for machines.

b. Suppose that instead of minimizing total monthly payments, Schick wished to maximize total production capacity. Solve the problem with this objective and comment.

 c. Comment on the validity of the linear programming assumptions for this model.