Determine how Sunblessed can maximize its profit. Please include your answer report with the model, and a description of your recommendation.
Question 2:
Sunblessed Juice Company sells bags of oranges and cartons of orange juice. Sunblessed grades oranges on a scale of 1 (poor) to 10 (excellent). At present, Sunblessed has 220,000 pounds of grade 6 oranges and 150,000 pounds of grade 9 oranges on hand. The average quality of oranges sold in bags must be at least 7, and the average quality of oranges used to produce orange juice must be at least 8. Each pound of oranges that is used for juice yields a revenue of $2.25 and incurs a variable cost (consisting of labor costs, variable overhead costs, inventory costs and so on) of $1.35. Each pound of oranges sold in bags yields a revenue of $2.00 and incurs a variable cost of $1.20.
- Determine how Sunblessed can maximize its profit. Please include your answer report with the model, and a description of your recommendation.
- Use SolverTable to determine how a change in the cost per bag of oranges changes the optimal solution. Specifically, vary the cost from $1.00 to $1.50 in steps of $0.05, and explain the results.
- Use SolverTable to determine how a change in the amount of grade 6 oranges available affects the optimal solution. Specifically, try varying this parameter from 180,000 to 260,000 in steps of 10,000, and explain the results.
- We would now like to change the required quality of oranges used for juicing from 5 to 9 in steps of 1, as well as the availability of both grade 6 and grade 9 oranges. The availability of both oranges has to change by the same amount (-15% to +15% in steps of 5%). Comment on the changes in the optimal profit.
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