Della Simpson, Inc., sells two popular brands of cookies: Dellas Delight and Bonnys Bourbon. Dellas Delight goes

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Della Simpson, Inc., sells two popular brands of cookies: Della’s Delight and Bonny’s Bourbon. Della’s Delight goes through the mixing and baking departments, and Bonny’s Bourbon, a filled cookie, goes through the mixing, filling, and baking departments.

Michael Shirra, vice president for sales, believes that at the current price, Della Simpson can sell all of its daily production of Della’s Delight and Bonny’s Bourbon. Both cookies are made in batches of 3,000. In each department, the time required per batch and the total time available each day are as follows:

1 Home Insert A 2 3 Della's Delight 4 Bonny's Bourbon 5 Total available per day Page Layout B Formulas Data C

Revenue and cost data for each type of cookie are as follows:

Home Insert A Page Layout 7 8 9 Revenue per batch 10 Variable cost per batch 11 Contribution margin per batch

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 Shirra’s decision as an LP model.
2. Compute the optimal number of batches of each type of cookie that Della Simpson, Inc., should make and sell each day to maximize operating income.

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Related Book For  book-img-for-question

Horngrens Cost Accounting A Managerial Emphasis

ISBN: 9780135628478

17th Edition

Authors: Srikant M. Datar, Madhav V. Rajan

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