Background (This case was taken from an article that appears in The Economist Nov. 2020) Barilla Pasta is the largest pasta maker in the world. The organization has a modern high-tech facility located at its world headquarters in Parma, Italy. Barilla exports 60% of its products; mainly to Europe and the U.S. Because of the COVID pandemic, people around the world are staying home (somewhat) and cooking for themselves. As a result, pasta sales world wide increased. Likewise, pasta sales for Barilla increased around 30% from 2019 to 2020. One of Barillas most important markets is Germany. Since March of 2020, Barilla has supplied 22% of the pasta and 39% of the pasta sauces and pestos eaten in Germany (The Economist, Nov. 2020). Global sales for Barilla were $4.2 billion for 2019.

Because of the international growth in pasta sales, Barilla may be experiencing problems with its hourly production capacity and its rail (train) shipments. You are an executive with Barilla and you are a member of a team responsible for inventory and supply chains. You need to evaluate whether to focus your attention on hourly production capacity or rail car shipments as a way to increase revenue streams.

1. Barilla has a total demand per ton shipment that represents $22,982 per day. The revenue (sales) per ton shipment for pasta (X 1) is $11,497. The revenue per ton shipment for the pasta sauce and pesto (X 2) is $11,485. Also, the production capacity that Barilla has available is 25 tons per hour. It takes 20 tons of capacity per hour to produce pasta and 4.58 tons of capacity per hour to produce the pesto and pasta sauces. Develop a linear program that will maximize the following daily revenue streams for Barilla, given that $5,633,753 is the daily revenue per shipment of pasta to Germany and $1,263,452 is the daily revenue for the sauces shipped to Germany.