Chapter 3 ■ Section 5 Practical Optimization 261

(b) Show that A(qc)  0 if and only if C(qc)  0. Then use part (a) to argue
that average cost A(q) is minimized when q  qc.

5 In Section 4, you saw a number of applications in which a formula was given and it
was required to determine either a maximum or a minimum value. In practice, things
Practical are often not that simple, and it is necessary to first gather information about a quan-
tity of interest, then formulate and analyze an appropriate mathematical model.
Optimization
In this section, you will learn how to combine the techniques of model-building
from Section 4 of Chapter 1 with the optimization techniques of Section 4. Here is a
procedure for dealing with such problems.

General Procedure for Analyzing Practical Optimization

Problems

Step 1. Begin by deciding precisely what you want to optimize. Once this has
been done, assign names to all variables of interest. It may help to pick let-
ters that suggest the nature of the quantity, such as R for revenue or A for
area.
Step 2. Draw a figure, if appropriate, and find an expression for the quantity to
be optimized.
Step 3. Use any equations involving the variables to eliminate all but one vari-
able from the quantity to be optimized. Determine any restrictions on the
independent variable.
Step 4. Use the methods of Section 4 to optimize f. Interpret your results in
terms of appropriate physical, geometric, or economic quantities.

This procedure is illustrated in the following examples.

EXAMPLE 5.1
x
The highway department is planning to build a picnic area for motorists along a major
highway. It is to be rectangular with an area of 5,000 square yards and is to be fenced
y y
off on the three sides not adjacent to the highway. What is the least amount of fenc-
Picnic area
ing that will be needed to complete the job?

Highway Solution
As in Example 4.1 of Chapter 1, Section 4, label the sides of the picnic area as indi-
cated in Figure 3.37 and let F denote the amount of fencing required. Then,
FIGURE 3.37 Rectangular picnic
area. F  x  2y
 262 Chapter 3 Additional Applications of the Derivative

The fact that the area is to be 5,000 tells you that

F(x)
5,000
xy  5,000 or y
x
To rewrite F in terms of the single variable x, substitute this expression for y into the
formula for F:

5,000 
200 10,000
Minimum F(x)  x  2 x
fencing x x
x
100 Since F(x) has a practical interpretation for any positive value of x, your goal is
to find the absolute minimum of F(x) on the interval x  0.
FIGURE 3.38 The graph of To find the critical value, set the derivative
10,000
F(x)  x  for x  0. 10,000
x F(x)  1 
x2
equal to zero and solve for x, getting
10,000
1 0 x2  10,000 or x  100
x2
Only the positive value x  100 lies in the interval x  0. Since this is the only
critical value in the interval, you can apply the second derivative test for absolute
20,000
extrema. In particular, the second derivative is F(x)  , which is positive when
x3
x  0. Hence, the critical point at x  100 is the absolute minimum of F on the inter-
val. That is, the least amount of fencing needed to complete the job is F(100)  200
yards. For reference, the graph of F(x) is sketched in Figure 3.38.

EXAMPLE 5.2
A cylindrical can is to be constructed to hold a fixed volume of liquid. The cost of
the material used for the top and bottom of the can is 3 cents per square inch, and
the cost of the material used for the curved side is 2 cents per square inch. Use cal-
culus to derive a simple relationship between the radius and height of the can that is
the least costly to construct.

Solution
Let r denote the radius, h the height, C the cost (in cents), and V the (fixed) volume
(see Figure 3.39). The goal is to minimize cost.
Cost  cost of top  cost of bottom  cost of side
 Chapter 3 ■ Section 5 Practical Optimization 263

where, for each component of the cost,

r Cost  (cost per square inch)(area)
Hence, Cost of top  cost of bottom  3(r2)
h
and Cost of side  2(2rh)  4rh
and the total cost is
2πr C  3r2  3r2  4rh  6r2  4rh
Before you can apply calculus, you must write the cost in terms of just one vari-
FIGURE 3.39 A cylinder of ra- able. To do this, use the fact that the can is to have a fixed volume V and solve the
dius r and height h has lateral equation
(curved) area A  2rh and vol-
ume V  r 2h. V  r2h
V
for h to get h (where V is a constant)
r2
Substitute this expression for h into the formula for C to get

r   6r
V 4V
C(r)  6r2  4r 2
2

r
Since the radius can be any positive number, the goal is to find the absolute min-
imum of C(r) on the interval r  0.
The derivative is
4V
C(r)  12r  (remember that V is a constant)
r2
which is zero when
4V V
12r  or 3r 
r2 r2
V
But h
r2
and so this equation says
3r  h
That is, assuming that the cost function is minimized when its derivative is zero, the
height of the least expensive can must be three times its radius.
Finally, to verify that this actually corresponds to the absolute minimum, convince


3 V
yourself that C(r) has only one first-order critical point, at r  , on the interval
3
 264 Chapter 3 Additional Applications of the Derivative

r  0 and apply the second derivative test for absolute extrema. Since the second
C(r) derivative
8V
C(r)  12 
r3
is clearly positive when r  0, it follows that the critical point that led to the rela-
tionship 3r  h corresponds to the absolute minimum of the cost function on the
Minimum cost interval r  0. For reference, the relevant portion of the graph of C(r) is sketched in
r
Figure 3.40.
3
V/3π

FIGURE 3.40 The cost function

4V
C(r)  6r 2 
r
for r  0. EXAMPLE 5.3
A manufacturer can produce blank videotape cassettes at a cost of $2 apiece. The cas-
settes have been selling for $5 apiece, and at this price, consumers have been buying
4,000 cassettes a month. The manufacturer is planning to raise the price of the cas-
settes and estimates that for each $1 increase in the price, 400 fewer cassettes will be
sold each month. At what price should the manufacturer sell the cassettes to maxi-
mize profit?

Solution
Let x denote the new price at which the cassettes will be sold and P(x) the corre-
sponding profit. The goal is to maximize the profit. As in Example 4.5 of Chapter 1,
Section 4, begin by stating the formula for profit in words.
Profit  (number of cassettes sold)(profit per cassette)
Since 4,000 cassettes are sold each month when the price is $5 and 400 fewer
will be sold each month for each $1 increase in the price, it follows that
Number of cassettes sold  4,000  400(number of $1 increases)
The number of $1 increases in the price is the difference x  5 between the new and
old selling prices. Hence,
Number of cassettes sold  4,000  400(x  5)
 400[10  (x  5)]
 400(15  x)
The profit per cassette is simply the difference between the selling price x and the
cost $2. That is,
Profit per cassette  x  2
Putting it all together,
P(x)  400(15  x)(x  2)
 Chapter 3 ■ Section 5 Practical Optimization 265

The goal is to find the absolute maximum of the profit function P(x). To deter-
mine the relevant interval for this problem, note that since the new price x is to be
at least as high as the old price $5, we must have x 5. On the other hand, the num-
ber of cassettes sold is 400(15  x), which will be negative if x  15. If you assume
that the manufacturer will not price the cassettes so high that no one buys them, you
can restrict the optimization problem to the closed interval 5
x
15.

P(x)

Maximum profit
16,900

x
2 5 8.5 15

FIGURE 3.41 The profit function P (x)  400(15  x)(x  2).

To find the critical points, compute the derivative using the product and constant
multiple rules to get
P(x)  400[(15  x)(1)  (x  2)(1)]
 400(15  x  x  2)  400(17  2x)
which is zero when
17  2x  0 or x  8.5
Comparing the values of the profit function
P(5)  12,000 P(8.5)  16,900 and P(15)  0
at this critical value and at the endpoints of the interval, you can conclude that the
maximum possible profit is $16,900, which will be generated if the cassettes are sold
for $8.50 apiece. For reference, the graph of the profit function is sketched in Figure
3.41.

AN ALTERNATIVE SOLUTION Since the number of cassettes sold in Example 5.3 is described in terms of the num-
TO THE PROFIT MAXIMIZATION ber N of $1 increases in price, you may wish to use N as the independent variable in
PROBLEM your solution rather than the new price itself. With this choice, you find that
 266 Chapter 3 Additional Applications of the Derivative

Number of cassettes  4,000  400N

Profit per cassette  (5  2)  N  3  N
Thus, the total profit is
P(N)  (4,000  400N)(3  N)  400(10  N)(3  N)
and the relevant interval is 0
N
10 (Do you see why?). The absolute maximum
in this case will occur when x  3.5 (provide the details); that is, when the old price
is increased from 5 to 5  3.5  8.5 dollars ($8.50). As you would expect, this is the
same as the result obtained using price as the independent variable in Example 5.3.

EXAMPLE 5.4
A cable is to be run from a power plant on one side of a river 900 meters wide to a
factory on the other side, 3,000 meters downstream. The cost of running the cable
under the water is $5 per meter, while the cost over land is $4 per meter. What is the
most economical route over which to run the cable?

Solution
To help you visualize the situation, begin by drawing a diagram as shown in Figure
P x
3.42. (Notice that in drawing the diagram in Figure 3.42, we have already assumed
900 that the cable should be run in a straight line from the power plant to some point P
on the opposite bank. Do you see why this assumption is justified?)
The goal is to minimize the cost of installing the cable. Let C denote this cost
3,000
and represent C as follows:
FIGURE 3.42 Relative positions C  5(number of meters of cable under water)
of factory, river, and power  4(number of meters of cable over land)
plant.
Since you wish to describe the optimal route over which to run the cable, it will
be convenient to choose a variable in terms of which you can easily locate the point
P. Two reasonable choices for the variable x are illustrated in Figure 3.43.
Before plunging into the calculations, take a minute to decide which choice
of variables is more advantageous. In Figure 3.43a, the distance across the
water from the power plant to the point P is (by the Pythagorean theorem)
(900)2  (3,000  x)2, and the corresponding total cost function is
C(x)  5(900)2  (3,000  x)2  4x
In Figure 3.43b, the distance across the water is (900)2  x2, and the total cost
function is
C(x)  5(900)2  x2  4(3,000  x)
The second function is the more attractive since the term 3,000  x is merely mul-
tiplied by 4, while in the first function it is squared and appears under the radical.
Chapter 3 ■ Section 5 Practical Optimization 267

x P 3,000 – x 3,000 – x P x

(900)2 + (3,000 – x)2 900 (900)2 + x2 900

(a) (b)

FIGURE 3.43 Two choices for the variable x.

Hence, you should choose x as in Figure 3.43b and work with the total cost function
C(x)  5(900)2  x2  4(3,000  x)
Since the distances x and 3,000  x cannot be negative, the relevant interval is
0
x
3,000, and your goal is to find the absolute minimum of the function C(x)
on this closed interval.
To find the critical values, compute the derivative
5 5x
C(x)  [(900)2  x2]1/2(2x)  4  4
2 (900)2  x2
and set it equal to zero to get
5x 5
40 or (900)2  x2  x
(900)2  x2 4
Square both sides of the equation and solve for x to get
25 2
(900)2  x2  x
16
16
x2  (900)2
9
4
x   (900)  1,200
3
Since only the positive value x  1,200 is in the interval 0
x
3,000, compute
C(x) at this critical value and at the endpoints x  0 and x  3,000. Since
C(0)  5(900)2  0  4(3,000  0)  16,500
C(1,200)  5(900)2  (1,200)2  4(3,000  1,200)  14,700
C(3,000)  5(900)2  (3,000)2  4(3,000  3,000)  15,660
it follows that the minimal installation cost is $14,700, which will occur if the cable
reaches the opposite bank 1,200 meters downstream from the power plant.
268 Chapter 3 Additional Applications of the Derivative

In the next example, the function to be maximized has practical meaning only
when its independent variable is a whole number. However, the optimization proce-
dure leads to a fractional value of this variable, and additional analysis is needed to
obtain a meaningful solution.

EXAMPLE 5.5
A bus company will charter a bus that holds 50 people to groups of 35 or more. If a
group contains exactly 35 people, each person pays $60. In large groups, everybody’s
fare is reduced by $1 for each person in excess of 35. Determine the size of the group
for which the bus company’s revenue will be greatest.

Solution
Let R denote the bus company’s revenue. Then,
R  (number of people in the group)(fare per person)
You could let x denote the total number of people in the group, but it is slightly more
convenient to let x denote the number of people in excess of 35. Then,
Number of people in the group  35  x
and Fare per person  60  x
so the revenue function is
R(x)  (35  x)(60  x)

Revenue R R(x)

Maximum
revenue

0 15
x
{ Number
of excess
people 0 12.5 15
x

(a) The revenue function R(x) (b) The revenue function

on the domain 0
x
15, over the entire interval
x an integer 0
x
15

FIGURE 3.44 The revenue function R(x)  (35  x)(60  x).

 Chapter 3 ■ Section 5 Practical Optimization 269

Since x represents the number of people in excess of 35 but less than 50, you want
to maximize R(x) for a positive integer x in the interval 0
x
15 (see Figure 3.44a).
However, to use the methods of calculus, consider the continuous function R(x) 
(35  x)(60  x) defined on the entire interval 0
x
15 (see Figure 3.44b).
The derivative is
R(x)  (35  x)(1)  (60  x)(1)  25  2x
which is zero when x  12.5. Since
R(0)  2,100 R(12.5)  2,256.25 R(15)  2,250
it follows that the absolute maximum of R(x) on the interval 0
x
15 occurs when
x  12.5.
But x represents a certain number of people and must be a whole number. Hence,
x  12.5 cannot be the solution to this practical optimization problem. To find the
optimal integer value of x, observe that R is increasing for 0  x  12.5 and decreas-
ing for x  12.5, as shown in Figure 3.44b.
It follows that the optimal integer value of x is either x  12 or x  13. Since
R(12)  2,256 and R(13)  2,256
you can conclude that the bus company’s revenue will be greatest when the group
contains either 12 or 13 people in excess of 35; that is, for groups of 47 or 48. The
revenue in either case will be $2,256.

INVENTORY CONTROL Next, we consider two important applications from economics: inventory control and
price elasticity of demand.
Inventory control is a common problem in business. In particular, for each ship-
ment of raw materials, a manufacturer must pay an ordering fee to cover handling and
transportation. When the raw materials arrive, they must be stored until needed, and
storage costs result. If each shipment of raw materials is large, few shipments will be
needed, so ordering costs will be low, while storage costs will be high. On the other
hand, if each shipment is small, ordering costs will be high because many shipments
will be needed, but storage costs will be low. Example 5.6 shows how the methods
of calculus can be used to determine the shipment size that minimizes total cost.

EXAMPLE 5.6
A bicycle manufacturer buys 6,000 tires a year from a distributor. The ordering fee
is $20 per shipment, the storage cost is 96 cents per tire per year, and each tire costs
$5.75. Suppose that the tires are used at a constant rate throughout the year and that
270 Chapter 3 Additional Applications of the Derivative

each shipment arrives just as the preceding shipment is being used up. How many
tires should the manufacturer order each time to minimize cost?

Solution
The goal is to minimize the total cost, which can be written as
Total cost  storage cost  ordering cost  purchase cost
Let x denote the number of tires in each shipment and C(x) the corresponding total
cost in dollars. Then,
Ordering cost  (ordering cost per shipment)(number of shipments)
Since 6,000 tires are ordered during the year and each shipment contains x tires, the
6,000
number of shipments is and so
x

Ordering cost  20 6,000

x 

120,000
x
Moreover,
Purchase cost  (total number of tires ordered)(cost per tire)
 6,000(5.75)  34,500
The storage cost is slightly more complicated. When a shipment arrives, all x tires
are placed in storage and then withdrawn for use at a constant rate. The inventory
decreases linearly until there are no tires left, at which time the next shipment arrives.
The situation is illustrated in Figure 3.45a. For fairly obvious reasons, this is some-
times called a just-in-time inventory pattern.

Inventory Inventory

x x

x/2

Time Time

(a) (b)

x
FIGURE 3.45 Inventory graphs: (a) actual inventory graph and (b) constant inventory of tires.
2
 Chapter 3 ■ Section 5 Practical Optimization 271

x
Explore! The average number of tires in storage during the year is , and the total yearly
x 2
storage cost is the same as if tires were kept in storage for the entire year (Figure
Construct the cost function if 2
the ordering fee is q. Graph the 3.45b). (This assertion, although reasonable, is not really obvious, and you have every
cost functions for q  10, 15, right to be unconvinced. In Chapter 6, you will learn how to prove this fact mathe-
20, and 25 using a viewing matically using integral calculus.) It follows that
rectangle of [0, 6,000]500 by Storage cost  (average number of tires stored)(storage cost per tire)
[0, 5,000]500. Describe the dif- x
ference in the graphs for these  (0.96)  0.48x
2
different values of q. Find the
minimum cost in each case. Putting it all together, the total cost is
Describe how the minimum 120,000
changes with the changing val- C(x)  0.48x   34,500
x
ues of q.
and the goal is to find the absolute minimum of C(x) on the interval
0  x
6,000
The derivative of C(x) is
120,000
C(x)  0.48 
x2
which is zero when
C(x) 120,000
x2   250,000 or x  500
0.48
Only the positive value x  500 is in the relevant interval 0  x
6,000. Since this
is the only critical value in the interval, you can apply the second derivative test for
absolute extrema. In particular, the second derivative of the cost function is
Minimal cost
240,000
x C(x) 
500 x3
which is positive when x  0. Hence, the absolute minimum of the total cost C(x)
FIGURE 3.46 Total cost C(x)  on the interval 0  x
6,000 occurs when x  500; that is, when the manufacturer
120,000 orders the tires in lots of 500. For reference, the graph of the total cost function is
0.48x   34,500.
x sketched in Figure 3.46.
Note

Since the derivative of the (constant) purchase price $34,500 in Example 5.6
was zero, this component of the total cost had no bearing on the optimiza-
tion problem. In general, economists distinguish between fixed costs (such
 272 Chapter 3 Additional Applications of the Derivative

as the total purchase price) and variable costs (such as the storage and order-
ing costs). To minimize total cost, it is sufficient to minimize the sum of all
the variable components of cost.

ELASTICITY OF DEMAND Consumer demand for a product is usually related to its price. In most cases, the
demand decreases as price increases, but the sensitivity of demand to price change
varies from one product to another. For some products, such as soap, flashlight bat-
teries, and salt, small percentage changes in price have little effect on demand. For
other products, such as airline tickets, designer furniture, and home loans, small per-
centage changes in price can have a considerable effect on demand.
If x(p) units are sold (that is, demanded) when the price is p dollars per unit, a
convenient measure of sensitivity of demand to changes in price is given by the ratio
of the percentage change of demand x to the percentage change of price p. Econo-
mists refer to this ratio E(p) as price elasticity of demand, and we have
100(dx/dp)
x p dx
E(p)  
100(dp/dp) x dp
p

Price Elasticity of Demand ■ If x(p) units of a commodity are sold

when the price is p dollars per unit, the price elasticity of demand is given by
p dx
E(p) 
x dp
If E(p)  1, the demand is said to be elastic
If 0  E(p)  1, the demand is inelastic
If E(p)  1, the demand is unitary

Here is an example.

EXAMPLE 5.7
A manufacturer estimates that x(p)  240  2p units of a particular commodity will
be sold when the price is p dollars per unit, for 0
p
120.
(a) Express the elasticity of demand as a function of p.
(b) Calculate the elasticity of demand when p  100. Is the demand elastic, inelas-
tic, or unitary at this price?
(c) For what price is the elasticity of demand equal to 1?
Chapter 3 ■ Section 5 Practical Optimization 273

Solution
(a) The elasticity of demand is

 
p dx p p
E(p)   (2) 
x dp 240  2p 120  p
(b) When p  100, the elasticity of demand is
100
E(100)   5
120  100
That is, when the price is $100 per unit, a 1% increase in price will produce a decrease
in demand of approximately 5%. Since 5  5  1, the demand is elastic.
(c) The elasticity of demand equals 1 when
p
1  ; 120  p  p; p  60
120  p
Thus, when the price is $60, a 1% increase in price will produce a 1% decrease in
demand.

Elasticity of demand can be used to analyze marginal revenue. Suppose x(p) units
are demanded when the price is p dollars per unit. Then the revenue associated with
the sale of these x units is R(p)  px(p), and by using the product rule, we obtain
the marginal revenue
dR
 
dp x dp
 p(1)  x  p 1 
dx dx p dx


1
p 1
E(p)
In general, demand decreases as price increases, so x(p)  0, and since p and
x(p) are positive, it follows that E(p)  0. Hence, when the demand is elastic, we
have E(p)  1 and


1
R(x)  p 1  0
E(p)
which means revenue is increasing. Similarly, when demand is inelastic, we have
1  E(p)  0 and marginal revenue satisfies R(x)  0, so revenue is decreasing.
These observations are illustrated in Figure 3.47.
 274 Chapter 3 Additional Applications of the Derivative

R(p)

Maximum revenue

Demand is inelastic Demand is elastic

p
|E(p)| < 1 |E(p)| = 1 |E(p)| > 1

FIGURE 3.47 Elasticity in relation to a revenue curve.

P . R . O . B . L . E . M . S 3.5

1. What number exceeds its square by the largest amount? [Hint: Find the number
x that maximizes f(x)  x  x2.]
2. What number is exceeded by its square root by the largest amount?
3. Find two positive numbers whose sum is 50 and whose product is as large as
possible.
4. Find two positive numbers x and y whose sum is 30 and are such that xy2 is as
large as possible.
RETAIL SALES 5. A store has been selling a popular computer game at the price of $40 per unit,
and at this price, players have been buying 50 units per month. The owner of the
store wishes to raise the price of the game and estimates that for each $1 increase
in price, 3 fewer units will be sold each month. If each unit costs the store $25,
at what price should the game be sold to maximize profit?
RETAIL SALES 6. A bookstore can obtain a certain gift book from the publisher at a cost of $3 per
book. The bookstore has been offering the book at a price of $15 per copy and,
at this price, has been selling 200 copies a month. The bookstore is planning to
lower its price to stimulate sales and estimates that for each $1 reduction in the
price, 20 more books will be sold each month. At what price should the book-
store sell the book to generate the greatest possible profit?
AGRICULTURAL YIELD 7. A Florida citrus grower estimates that if 60 orange trees are planted, the average
yield per tree will be 400 oranges. The average yield will decrease by 4 oranges
 Chapter 3 ■ Section 5 Practical Optimization 275

per tree for each additional tree planted on the same acreage. How many trees
should the grower plant to maximize the total yield?
HARVESTING 8. Farmers can get $2 per bushel for their potatoes on July first, and after that, the
price drops by 2 cents per bushel per day. On July first, a farmer has 80 bushels
of potatoes in the field and estimates that the crop is increasing at the rate of 1
bushel per day. When should the farmer harvest the potatoes to maximize revenue?
FENCING 9. A city recreation department plans to build a rectangular playground having an
area of 3,600 square meters and surround it by a fence. How can this be done
using the least amount of fencing?
FENCING 10. There are 320 yards of fencing available to enclose a rectangular field. How should
this fencing be used so that the enclosed area is as large as possible?
11. Prove that of all rectangles with a given perimeter, the square has the largest area.
12. Prove that of all rectangles with a given area, the square has the smallest perimeter.
13. A rectangle is inscribed in a right triangle, as shown in the accompanying figure.
If the triangle has sides of length 5, 12, and 13, what are the dimensions of the
inscribed rectangle of greatest area?

13 5

12

14. A triangle is positioned with its hypotenuse on a diameter of a circle, as shown

in the accompanying figure. If the circle has radius 4, what are the dimensions of
the triangle of greatest area?

4
 276 Chapter 3 Additional Applications of the Derivative

CONSTRUCTION COST 15. A carpenter has been asked to build an open box with a square base. The sides
of the box will cost $3 per square meter, and the base will cost $4 per square
meter. What are the dimensions of the box of greatest volume that can be con-
structed for $48?
CONSTRUCTION COST 16. A closed box with a square base is to have a volume of 250 cubic meters. The
material for the top and bottom of the box costs $2 per square meter, and the
material for the sides costs $1 per square meter. Can the box be constructed for
less than $300?
DISTANCE BETWEEN 17. A truck is 300 miles due east of a car and is traveling west at the constant speed
MOVING OBJECTS of 30 miles per hour. Meanwhile, the car is going north at the constant speed of
60 miles per hour. At what time will the car and truck be closest to each other?
[Hint: You will simplify the calculation if you minimize the square of the dis-
tance between the car and truck rather than the distance itself. Can you explain
why this simplification is justified?]
INSTALLATION COST 18. A cable is to be run from a power plant on one side of a river 1,200 meters wide
to a factory on the other side, 1,500 meters downstream. The cost of running the
cable under the water is $25 per meter, while the cost over land is $20 per meter.
What is the most economical route over which to run the cable?
INSTALLATION COST 19. Find the most economical route in Problem 18 if the power plant is 2,000 meters
downstream from the factory.
SPY STORY 20. It is noon, and the spy is back from space (see Problem 57 in Section 2 of Chap-
ter 2) and driving a jeep through the sandy desert in the tiny principality of Alta
Loma. He is 32 kilometers from the nearest point on a straight paved road. Down
the road 16 kilometers is a power plant in which a band of international terrorists
has placed a time bomb set to explode at 12:50 P.M. The jeep can travel 48 km/hr
in the sand and 80 km/hr on the paved road. If he arrives at the power plant in
the shortest possible time, how long will our hero have to defuse the bomb? [Hint:
The goal is to minimize time, which is distance divided by speed.]

16
Cola
h
32

PROBLEM 20 PROBLEM 21
 Chapter 3 ■ Section 5 Practical Optimization 277

PACKAGING 21. Use the fact that 12 fluid ounces is approximately 6.89 cubic inches to find the
dimensions of the 12-ounce soda can that can be constructed using the least
amount of metal. Compare these dimensions with those of one of the soda cans
in your refrigerator. What do you think accounts for the difference?
PACKAGING 22. A cylindrical can is to hold 4 cubic inches of frozen orange juice. The cost per
square inch of constructing the metal top and bottom is twice the cost per square
inch of constructing the cardboard side. What are the dimensions of the least
expensive can?
23. What is the maximum possible volume of a cylindrical can with no top that can
be made from 27 square inches of metal?
24. A cylindrical can (with top) is to be constructed using a fixed amount of metal.
Use calculus to derive a simple relationship between the radius and height of the
can having the greatest volume.
CONSTRUCTION COST 25. A cylindrical container with no top is to be constructed to hold a fixed volume of
liquid. The cost of the material used for the bottom is 3 cents per square inch,
and that for the curved side is 2 cents per square inch. Use calculus to derive a
simple relationship between the radius and height of the least expensive container.
POSTER DESIGN 26. A printer receives an order to produce a rectangular poster containing 25 square
centimeters of print surrounded by margins of 2 centimeters on each side and 4
centimeters on the top and bottom. What are the dimensions of the smallest piece
of paper that can be used to make the poster? [Hint: An unwise choice of vari-
ables will make the calculations unnecessarily complicated.]
PRODUCTION COST 27. A plastics firm has received an order from the city recreation department to man-
ufacture 8,000 special Styrofoam kickboards for its summer swimming program.
The firm owns 10 machines, each of which can produce 30 kickboards an hour.
The cost of setting up the machines to produce the kickboards is $20 per machine.
Once the machines have been set up, the operation is fully automated and can be
overseen by a single production supervisor earning $15 per hour.
(a) How many of the machines should be used to minimize the cost of production?
(b) How much will the supervisor earn during the production run if the optimal
number of machines is used?
(c) How much will it cost to set up the optimal number of machines?

INVENTORY 28. An electronics firm uses 600 cases of transistors each year. The cost of storing
one case for a year is 90 cents, and the ordering fee is $30 per shipment. How
many cases should the firm order each time to keep total cost at a minimum?
(Assume that the transistors are used at a constant rate throughout the year and
that each shipment arrives just as the preceding shipment has been used up.)
INVENTORY 29. A store expects to sell 800 bottles of perfume this year. The perfume costs $20
per bottle, the ordering fee is $10 per shipment, and the cost of storing the per-
fume is 40 cents per bottle per year. The perfume is consumed at a constant rate
 278 Chapter 3 Additional Applications of the Derivative

throughout the year, and each shipment arrives just as the preceding shipment is
being used up.
(a) How many bottles should the store order in each shipment to minimize cost?
(b) How often should the store order the perfume?

ELASTICITY 30. Suppose that x(p)  60  0.1p units of a commodity are demanded when p dollars
per unit are charged, for 0
p
600.
(a) Express the elasticity E(p) as a function of p.
(b) Calculate the elasticity of demand when the price is p  200. Interpret your
answer.
(c) At what price is the elasticity of demand equal to 1?

ELASTICITY 31. Suppose that x( p)  200  2p2 units of a commodity are demanded when p
dollars per unit are charged, for 0
p
10.
(a) Express the elasticity of demand as a function of p.
(b) Calculate the elasticity of demand when the price is p  6. Interpret your
answer.
(c) At what price is the elasticity of demand equal to 1?

ELASTICITY AND REVENUE 32. Suppose that x(p)  500  2p units of a commodity are demanded when p dollars
per unit are charged, for 0
p
250.
(a) Determine where the demand is elastic, inelastic, and of unit elasticity with
respect to price.
(b) Use the results of part (a) to determine the intervals of increase and decrease
of the revenue function and the price at which revenue is maximized.
(c) Find the total revenue function explicitly and use its first derivative to deter-
mine its intervals of increase and decrease and the price at which revenue is
maximized.
(d) Graph the relevant portions of the demand and revenue functions.

ELASTICITY AND REVENUE 33. Suppose that x(p)  120  0.1p2 units of a commodity are demanded when p
dollars per unit are charged, for 0
p
1,200.
(a) Determine where the demand is elastic, inelastic, and of unit elasticity with
respect to price.
(b) Use the results of part (a) to determine the intervals of increase and decrease
of the revenue function and the price at which revenue is maximized.
(c) Find the total revenue function explicitly and use its first derivative to deter-
mine its intervals of increase and decrease and the price at which revenue is
maximized.
(d) Graph the relevant portions of the demand and revenue functions.

CONSTRUCTION 34. An open box is to be made from a square piece of cardboard, 18 inches by 18
inches, by removing a small square from each corner and folding up the flaps to
 Chapter 3 ■ Section 5 Practical Optimization 279

form the sides. What are the dimensions of the box of greatest volume that can
be constructed in this way?
POSTAL REGULATIONS 35. According to postal regulations, the girth plus length of parcels sent by fourth-
class mail may not exceed 108 inches. What is the largest possible volume of a
rectangular parcel with two square sides that can be sent by fourth-class mail?

Girth = 4x
Girth
2πR

x
y L
R

PROBLEM 35 PROBLEM 36

POSTAL REGULATIONS 36. Refer to Problem 35. What is the largest volume of a cylindrical parcel that can
be sent by fourth-class mail?

MINIMAL COST 37. A manufacturer finds that in producing x units per day (for 0  x  100), three
different kinds of cost are involved:
(a) A fixed cost of $1,200 per day in wages
(b) A production cost of $1.20 per day for each unit produced
100
(c) An ordering cost of 2 dollars per day.
x
Express the total cost as a function of x and determine the level of production that
results in minimal total cost.
PRODUCTION COST 38. Each machine at a certain factory can produce 50 units per hour. The setup cost
is $80 per machine, and the operating cost is $5 per hour. How many machines
should be used to produce 8,000 units at the least possible cost? (Remember that
the answer should be a whole number.)
RETAIL SALES 39. A retailer has bought several cases of a certain imported wine. As the wine ages,
its value initially increases, but eventually the wine will pass its prime and its
value will decrease. Suppose that x years from now, the value of a case will be
changing at the rate of 53  10x dollars per year. Suppose, in addition, that stor-
age rates will remain fixed at $3 per case per year. When should the retailer sell
the wine to obtain the greatest possible profit?
 280 Chapter 3 Additional Applications of the Derivative

480
TRANSPORTATION COST 40. For speeds between 40 and 65 miles per hour, a truck gets miles per gallon
x
when driven at a constant speed of x miles per hour. Diesel gasoline costs $1.12
per gallon, and the driver is paid $12 per hour. What is the most economical con-
stant speed between 40 and 65 miles per hour at which to drive the truck?
DEMAND 41. A manufacturer estimates that when the price of a certain product is p dollars per
72
unit, then x(p)  units will be sold. Should the price be raised or lowered to
p
increase revenue R( p)  px(p)? Explain.
OPTIMAL SETUP COST 42. Suppose that at a certain factory, setup cost is directly proportional to the num-
ber N of machines used and operating cost is inversely proportional to N. Show
that when the total cost is minimal, the setup cost is equal to the operating cost.
RECYCLING 43. To raise money, a service club has been collecting used bottles that it plans to
deliver to a local glass company for recycling. Since the project began 80 days
ago, the club has collected 24,000 pounds of glass for which the glass company
currently offers 1 cent per pound. However, because bottles are accumulating
faster than they can be recycled, the company plans to reduce by 1 cent each day
the price it will pay for 100 pounds of used glass. Assume that the club can con-
tinue to collect bottles at the same rate and that transportation costs make more
than one trip to the glass company unfeasible. What is the most advantageous time
for the club to conclude its project and deliver the bottles?
INSTALLATION COST 44. For the summer, the company installing the cable in Example 5.4 has hired Frank
Kornercutter as a consultant. Frank, recalling a problem from first-year calculus,
asserts that no matter how far downstream the factory is located (beyond 1,200
meters), it would be most economical to have the cable reach the opposite bank
1,200 meters downstream from the power plant. The supervisor, amused by
Frank’s naivete, replies, “Any fool can see that if the factory is farther away, the
cable should reach the opposite bank farther downstream. It’s just common sense!”
Of course, Frank is no common fool, but is he right? Why?
RESPIRATION 45. Biologists define the flow F of air in the trachea by the formula F  SA, where
S is the speed of the air and A is the area of a cross section of the trachea.

A = πr 2
 Chapter 3 ■ Section 5 Practical Optimization 281

(a) Assume that the cross section of the trachea is circular and use the formula
from Example 4.3 for the speed of air in the trachea during a cough to express
the flow F as a function of the radius r.
(b) Find the radius r for which the flow is greatest.

a
ELASTICITY 46. Suppose that the demand equation for a certain commodity is q  , where a
pm
and m are positive constants. Show that the elasticity of demand is equal to m
for all values of p. Interpret this result.
TRANSPORTATION COST 47. A truck is hired to transport goods from a factory to a warehouse. The driver’s
wages are figured by the hour and so are inversely proportional to the speed at
which the truck is driven. The amount of gasoline used is directly proportional to
the speed at which the truck is driven, and the price of gasoline remains constant
during the trip. Show that the total cost is smallest at the speed for which the
driver’s wages are equal to the cost of the gasoline used.
AVERAGE PRODUCTIVITY 48. The output Q at a certain factory is a function of the number L of worker-hours
of labor that are used. Use calculus to prove that when the average output per
worker-hour is greatest, the average output is equal to the marginal output per
worker-hour. [Hint: The marginal output per worker-hour is the derivative of out-
put Q with respect to labor L.] You may assume without proof that the first-order
critical point of the average output function is actually the desired absolute
maximum.
PRODUCTION COST 49. A manufacturing firm receives an order for q units of a certain commodity. Each
of the firm’s machines can produce n units per hour. The setup cost is s dollars
per machine, and the operating cost is p dollars per hour.
(a) Derive a formula for the number of machines that should be used to keep total
cost as low as possible.
(b) Prove that when the total cost is minimal, the cost of setting up the machines
is equal to the cost of operating the machines.

50. Jack wishes to carry a pipe horizontally around the corner shown in the accom-
panying figure. What is the length of the longest pipe that will fit?

3 ft

Pipe
4 ft
 282 Chapter 3 Additional Applications of the Derivative

51. The stiffness of a rectangular beam is proportional to the product of its width and
the cube of its depth. Find the dimensions of the stiffest beam that can be cut
from a wooden log of diameter 15 inches.

in.
15
h

INVENTORY 52. The inventory model analyzed in Example 5.6 is not the only such model possi-
ble. Suppose a company must supply N units per time period at a uniform rate.
Assume that the storage cost per unit is D1 dollars per time period and that the
setup cost is D2 dollars. If production is at a uniform rate of m units per time
period (with no items in inventory at the end of each period), it can be shown that
the total storage cost is C1 
D1x
2
1 
N
m 
, where x is the number of items pro-
duced in each run.
(a) Show that the total average cost per period is

 
D1x N D2N
C 1 
2 m x
(b) Find an expression for the number of items that should be produced in each
run in order to minimize the total average cost per time period.
(c) The optimum quantity found in the inventory problem in Example 5.6 is some-
times called the economic order quantity (EOQ), while the optimum found
in part (b) of this problem is called the economic production quantity (EPQ).
Modern inventory management goes far beyond the simple conditions in the
EOQ and EPQ models, but elements of these models are still very important.
For instance, the just-in-time inventory pattern described in Example 5.6 fits
well with the production management philosophy of the Japanese. Read an
article on Japanese production methods and write a paragraph on why the
Japanese regard using space for the storage of materials as undesirable.*

* You may wish to begin your search with the text by Philip E. Hicks, Industrial Engineering and
Management: A New Perspective, McGraw-Hill, Inc., New York, 1994, pages 144–170.
 Chapter 3 ■ Review Chapter Summary and Review Problems 283

EFFECT OF TAXATION 53. A monopolist is a manufacturer who can manipulate the price of a commodity
ON A MONOPOLY
and usually does so with an eye toward maximizing profit. When the government
taxes output, the tax effectively becomes an additional cost item, and the monop-
olist is forced to decide how much of the tax to absorb and how much to pass on
to the consumer.
Suppose a particular monopolist estimates that when x units are produced, the
7
total cost will be C(x)  x2  5x  100 dollars and the market price of the
8
3
commodity will be p(x)  15  x dollars per unit. Further assume that the gov-
8
ernment imposes a tax of t dollars on each unit produced.
2
(a) Show that profit is maximized when x  (10  t).
5
(b) Suppose that government assumes that the monopolist will always act so as
to maximize total profit. What value of t should be chosen so as to guarantee
maximum total tax revenue?
(c) If the government chooses the optimum rate of taxation found in part (b), how
much of this tax will be absorbed by the monopolist and how much will be
passed on to the consumer?
(d) Read an article on taxation and write a paragraph on how it affects consumer
spending.*

CHAPTER SUMMARY AND REVIEW PROBLEMS

IMPORTANT TERMS, SYMBOLS, f is increasing f(x)  0
AND FORMULAS f is decreasing f(x)  0
First-order critical point: (c, f(c)), where f(c)  0 or f(c) does not exist
Relative maxima and minima
First derivative test for relative extrema: If f(c)  0 or f(c) does not exist, then

f' > 0 f' < 0 f' < 0 f' > 0 f' > 0 f' > 0 f' < 0 f' < 0
c c c c
Relative Relative No extremum
maximum at x = c minimum at x = c at x = c

* You may wish to begin your search with the text by Philip E. Hicks, Industrial Engineering and
Management: A New Perspective, McGraw-Hill, Inc., New York, 1994, pages 144–170.