Question
ABC Baskets sells three sizes of fruit baskets: small, medium, and large. Each basket weighs 1 pound. They use five types of fruits and have
ABC Baskets sells three sizes of fruit baskets: small, medium, and large. Each basket weighs 1 pound. They use five types of fruits and have just received the following shipments:
Fruit | Shipment Size (lbs) | Shipment Cost |
Apple | 6000 | $7,500 |
Orange | 7500 | $7,125 |
Banana | 7500 | $6,750 |
Pear | 6000 | $7,200 |
Kumquat | 7500 | $7,875 |
The Small Basket consists of 15% Apples, 25% Orange, 25% Bananas, 10% Pears, and 25% Kumquats. The Medium Basket consists of 20% of each type of fruit, and the Large Basket consists of 25% Apples, 15% Orange, 15% Bananas, 25% Pears, and 20% Kumquats. The orders received so far and the profit margins are as follows:
Basket Size | Orders (pounds) | Profit per Basket |
Small | 10,000 | $16.50 |
Medium | 3,000 | $20.00 |
Large | 5,000 | $22.50 |
The profit per basket does not account for the cost of the fruit used in it. All of the orders already received must be satisfied, and any leftover fruit will be donated to the local shelter. Help ABC maximize its profit while meeting the existing orders.
a) If additional quantities of fruit can be purchased, how will the total profit be affected?
b) ABC has been offered an additional 1000 lbs of apples at $1000 from a supplier. Should they take the offer?
c) Even though it will affect future business, ABC has decided that they will consider not meeting all the existing orders. How would this affect the profit?
d) The fruit basket market is very volatile and the profit margins could always change. For which ranges of values for the profits per basket would the current solution remain optimal?
Please answer in excel with detail steps.
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