=+8-41 KKK Optimal product mix (Appendix 8-1) (CMA adapted) OBJECTIVES 2, 5 Della Simpson Ltd sells two popular brands of biscuits: Della’s Delight and Bonny’s Bourbon. Della’s Delight goes through the Mixing and Baking Departments, and Bonny’s Bourbon, a filled biscuit, goes through the Mixing, Filling and Baking Departments.

Michael O’Brien, vice-president for sales, believes that, at the current price, Della Simpson Ltd can sell all of its daily production of Della’s Delight and Bonny’s Bourbon. Both biscuits are made in batches of 3000. In each department, the time required per batch and the total time available each day are as follows:

1 2

3 4

5 A B C D Mixing Filling Baking thgileD s’alleD 03 0 10 Bonny’s Bourbon 15 15 15 Total available per day 660 270 300 Department minutes Revenue and cost data for each type of biscuit are:

7 8

9 10 11 12 13 A B C Della’s Bonny’s Delight Bourbon Revenue per batch 475 375 Variable cost per batch 175 125 Contribution margin per batch 300 250 Monthly fixed costs

(allocated to each product) $18 650 $22 350

$

$ $

$

Required 1 Using D to represent the batches of Della’s Delight and B to represent the batches of Bonny’s Bourbon made and sold each day, formulate O’Brien’s decision as an LP model.