A renowned chocolatier, Francesco Schreder, makes three kinds of chocolate confectionery: artisanal truffles, handcrafted chocolate nuggets, and

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A renowned chocolatier, Francesco Schröeder, makes three kinds of chocolate confectionery: artisanal truffles, handcrafted chocolate nuggets, and premium gourmet chocolate bars. He uses the highest quality of cacao butter, dairy cream, and honey as the main ingredients. Francesco makes his chocolates each morning, and they are usually sold out by the early afternoon. For a pound of artisanal truffles, Francesco uses 1 cup of cacao butter, 1 cup of honey, and 1⁄2 cup of cream. The handcrafted nuggets are milk chocolate and take 1⁄2 cup of cacao, 2⁄3 cup of honey, and 2/3 cup of cream for each pound. Each pound of the chocolate bars uses 1 cup of cacao butter, 1⁄2 cup of honey, and 1⁄2 cup of cream. One pound of truffles, nuggets, and chocolate bars can be purchased for $35, $25, and $20, respectively. A local store places a daily order of 10 pounds of chocolate nuggets, which means that Francesco needs to make at least 10 pounds of the chocolate nuggets each day. Before sunrise each day, Francesco receives a delivery of 50 cups of cocao butter, 50 cups of honey, and 30 cups of dairy cream. 

a. Formulate and solve the LP model that maximizes revenue given the constraints. How much of each chocolate product should Francesco make each morning? What is the maximum daily revenue that he can make? 

b. Report the shadow price and the range of feasibility of each binding constraint. 

c. If the local store increases the daily order to 25 pounds of chocolate nuggets, how much of each product should Francesco make?

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Business Analytics Communicating With Numbers

ISBN: 9781260785005

1st Edition

Authors: Sanjiv Jaggia, Alison Kelly, Kevin Lertwachara, Leida Chen

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