Formulate and solve the following resource allocation problem using the Simplex method: A baker produces large and small loaves of bread. The contribution margin is Ksh. 5 for large loaves and Ksh. 3

SECTION A: QUESTION ONE (30 Marks)

To solve this resource allocation problem using the Simplex method, we first formulate it as a linear programming problem.

Let $x_1$ be the number of large loaves produced.
Let $x_2$ be the number of small loaves produced.

Objective Function: Maximize total contribution.
Contribution from large loaf = Ksh. 5
Contribution from small loaf = Ksh. 3

$$\text{Maximize } Z = 5x_1 + 3x_2$$

Constraints:

1. Demand for large loaves: $$x_1 \le 280$$
2. Demand for small loaves: $$$$