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4. A seller has secured a stall at a local event for three weeks, to sell new diet drinks. Before the start of the event,
4. A seller has secured a stall at a local event for three weeks, to sell new diet drinks. Before the start of the event, he needs to decide whether to produce 50 bottles or 100 bottles of these drinks. The total cost of production for 50 bottles is RM500 while the total cost of production for 100 bottles is RM800. These drinks require special storage temperature. The renting cost for a fridge that can store 50 bottles is RM150 per week. The renting cost for a fridge that can store 100 bottles is RM100 per week in the first two weeks and RM700 in the third week. The selling price of the diet drinks fluctuates every week. The table below gives the selling prices for the three weeks. End of week 1 2 3 Selling price (RM) 32 30 50 (a) Determine, using dynamic programming technique, the maximum profit: i) if 50 bottles are produced ii) if 100 bottles are produced [14 marks] (b) Should the seller produce 50 bottles or 100 bottles of diet drink for the event. What is the optimal selling strategy over three weeks, and what is the maximum profit he can achive? [6 marks]
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