1. Cooking Oil Blending with InventoryA company makes very fine cooking oil used in used in high-quality restaurants for salad oil. It is ablend of 5 different vegetable oils. The following table gives the posted prices of raw vegetable oils over a3-month period of next year. These prices can be locked in now by means of futures contracts.Raw oil prices (Pesos)Price of oilCoconutMonthCornPeanutSesameSunflowerJan1.791.722.031.881.72Feb1.801.401.722.032.03MarHardness1.728.81.491.562.032.195.04.22.06.1The hardness of the blend = weighted average of hardness of oils in the blend, must be between 3.0 and5.8.The company's blending plant has a monthly capacity for processing:at most 150 liter of corn, peanut, and coconut oils combinedat most 100 liter of sesame and sunflower oils combinedAt the start of the 3-month period assume that there are 300 liters of each kind of vegetable oil instorage. The plan must provide for the same quantities of each oil in storage at the end of the 3-monthperiod. For each oil, the storage capacity is 500 liters; the cost of keeping the oil in storage from onemonth to the next is P80/liter.The amount of cooking oil produced = 0.96x(sum of the amounts of vegetable oils blended).Given the product's popularity, all the cooking oil that is produced in a month can be sold in that monthitself at a price of P290/liter. It is required to formulate a 3-month plan that gives the amount of eachvegetable oil to purchase each month, the amount of cooking oil to produce each month, and the amountof each vegetable oil to hold over in storage for the succeeding month.

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Answered: Given the product's popularity, all the…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter7: Nonlinear Optimization Models

Section7.3: Pricing Models

Problem 14P: PRICING SUITS AT SULLIVANS Sullivans is a retailer of upscale mens clothing. Suits cost Sullivans...

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