Question
A local company purchases apples from local growers and makes applesauce and apple juice. It costs 0.7 to produce a kilogram of applesauce and 0.5
A local company purchases apples from local growers and makes applesauce and apple juice. It costs 0.7 to produce a kilogram of applesauce and 0.5 to produce a litre of apple juice. The company wants to meet but not exceed the demand for each product.
The marketing manager estimates that the demand for applesauce is 5000 kilogram plus additional 4 kilograms for each 1 spent on advertising. The demand for apple juice is estimated to be 3000 litres plus additional 4 litres for every 1 spent to promote apple juice. The company has 12000 to spend on producing and advertising applesauce and apple juice. The company has a policy that at least 25% but no more than 55% of this budget should be used for producing apple juice.
Given that the applesauce sells for 2 per kilogram, apple juice sells for 1.65 per litre, what is the maximal profit that the company can achieve using the budget in optimal way?
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