Answered step by step
Verified Expert Solution
Question
1 Approved Answer
2.6 Coffee Blending and Sales Hill-O-Beans Coffee Company blends four component beans into hree final blends of coffee: one is sold to luxury hotels, another
2.6 Coffee Blending and Sales Hill-O-Beans Coffee Company blends four component beans into hree final blends of coffee: one is sold to luxury hotels, another to restaurants, and the third to upermarkets for store-label brands. The company has four reliable bean suppliers: Argentine bundo, Peruvian Colmado, Brazilian Maximo, and Chilean Saboro. The table below summarizes he very percise recipes for the final coffee blends, the cost and availability information for the four components, and the wholesale price per pound of the final blends. The percentages indicate the raction of each component to be used in each blend. Componenet (pounds) Hotel Rest Market Cost per pound Max weekly availability bundo 20% 35% 10% $0.60 40,000 Colmado 40% 15% 35% $0.80 25,000 Maximo 15% 20% 40% $0.55 20,000 aboro 25% 30% 15% $0.70 45,000 Wholesale price per $1.25 $1.50 $1.40 bound he processor's plant can handle no more than 100,000 lb per week, and Hill-O-Beans would like o operate at capacity, if possible. Selling the final blends is not a problem, although the Marketing Department requires minimum productions levels of 10,000, 25,000, and 30,000 lb, respectively, for he hotel, restaurant and market blends. a. To maximize weekly profit, how many pounds of each component should be purchased? b. How would the optimal profic change if there were a 1000-lb increase in the availabileans? Colmado? Maximo? Saboro
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started