Formulation of LPP:
Let's say that the merchant stocks x units of desktop model and y units of portable model.
The information given in the question is listed below:
Model
|
No. of Units
|
Cost
|
Profit
|
Desktop
|
x
|
25,000
|
4,500
|
Portable
|
y
|
40,000
|
5,000
|
Total cost = 25,000x + 40,000y.
Objective function is profit P = 4,500x + 5,000y.
Constraints:
Demand constraint:
x + y ≤ 250 ... (1)
Cost constraint:
25,000x + 40,000y ≤ 70,00,000
⇒ 5x + 8y ≤ 1400 ... (2)
Physical constraint:
x, y ≥ 0 ... (3)
Graph:
Solving the lines in equation (1) and (2) simultaneously:
Multiplying equation (1) by 5 and subtracting from (2), we get:
3y = 150
⇒ y = 50
Substituting this in equation (1), we get:
x = 250 - 50 = 200
∴ The lines intersect at x = 200, y = 50.
All the points and the feasible region are shown in the graph below:

The values of the objective function P = 4,500x + 5,000y at each of the corner points of the feasible region (shaded) are listed below:
x
|
y
|
P = 4,500x + 5,000y
|
0
|
0
|
0
|
0
|
175
|
8,75,000
|
200
|
50
|
11,50,000
|
250
|
0
|
11,25,000
|
We observe that the maximum value of the profit (P) is for x = 200, y = 50.
Therefore, the merchant needs to stock 200 desktop and 50 portable computers for maximum profit.