CMA Final · Strategic Cost Management · Assignment
A firm assigns three salespersons P, Q, R to three territories, one each, to maximise profit. Monthly profit in Rs. thousand for territories 1, 2, 3: P: 40, 35, 30; Q: 38, 42, 36; R: 34, 31, 39. What is the maximum total profit?
The maximum profit is Rs. 121 thousand, achieved by assigning P to territory 1, Q to territory 2 and R to territory 3 for 40+42+39. All other five assignments give lower totals, the lowest being Rs. 99 thousand.
- ARs. 99 thousand
- BRs. 112 thousand
- CRs. 121 thousandCorrect
- DRs. 106 thousand
Explanation
Evaluating all six assignments gives 121 (P1, Q2, R3), 107, 112, 105, 99 and 106. The maximum is P-1, Q-2, R-3 = 40+42+39 = 121. Rs. 99 thousand is the minimum assignment, which results from wrongly minimising instead of maximising.
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