Question
A nut company produces three different products, each in a 1-pound can: Almond-Lovers Mix, Walnut-Lovers Mix, and the Thrifty Mix. Three types of nuts are
A nut company produces three different products, each in a 1-pound can: Almond-Lovers Mix, Walnut-Lovers Mix, and the Thrifty Mix. Three types of nuts are used in the products, almonds, walnuts and peanuts. The company currently has 350 pounds of almonds, 150 pounds of walnuts, and 1,000 pounds of peanuts. Each of the productsmust contain a certain percentage of each type of nut, as shown in the below table. The table shows the revenue per can, as well as the cost per pound to purchase nuts.
A. Given the current stock of nuts, how many cans of each product should be produced to maximize revenue?
B. Does the solution developed in (a) change if Nutmeg is interested in maximizing contribution margin (defined as revenue per unit-raw material cost)?
C. If 50 additional pounds of walnuts became available, how would your contribution-margin maximizing solution from part (b) change?
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