Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A farmer in Minnesota is practicing integrated crop production in his 1,000-acre farm. Each year, he grows Soft wheat (SW), CPS wheat (CP), Spring wheat

A farmer in Minnesota is practicing integrated crop production in his 1,000-acre farm. Each year, he grows Soft wheat (SW), CPS wheat (CP), Spring wheat (SpW), Feed barley (FB), Malt barley (MB), Argentine canola (AC), Dry beans (DB), Sugar beet (SB) and Lentil (LE). He devotes at least 10 acres to each crop, and uses LP for maximizing gross margin (often written as GM; its another word for revenue) given the constraints he faces. He has 4,000 hours of available labor, 500 hours of machine time, 35,000 pounds of N fertilizer, 15,000 pounds of P fertilizer, 18,000 pounds of K fertilizer and $125,000 of operating capital. Per acre GM and input requirement to formulate an LP problem are given below:

image text in transcribed

1. Suppose that the farmer has the option to rent additional land at a cost of $25/acre. Should he be renting land? (formulate the problem adding rented land as an additional decision variable and solve the problem to find the answer)

2. If the rental rate is $150/acre, should he still be renting? Why or why not?

Items SW CP SpW FB MBAC DB SB LE GM($/ac) 189 175 169 122 155 210 147 205 132 3 3 3 3 2.5 2.5 3.5 3 4 2 Labor (h/ac) Machine (h/ac) 0.5 0.5 0.5 0.4 0.5 0.9 0.3 1.1 0.3 N Fertilizer (lb/ac) 40 35 35 35 40 65 10 50 0 P Fertilizer (lb/ac) 10 10 10 210 12 15 30 32 27 K Fertilizer (lb/ac) 15 15 15 10 15 20 12 60 10 Op. Captial (S/ac) 90 85 85 70 75 125 75 120 65

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: By David N. Ricchiute

6th Edition

0324024029, 9780324024029

More Books

Students also viewed these Accounting questions