Beverly Ann Cosmetics has created two new perfumes: Summer Passion and Ocean Breeze. It costs $5.25 to purchase the fragrance needed for each bottle of Summer Passion and $4.70 for each bottle of Ocean Breeze. The marketing department has stated that at least 30% but no more than 70% of the product mix be Summer Passion; the forecasted monthly demand is 7,000 bottles and is estimated to increase by 8 bottles for each $1 spent on advertising. Summer Passion sells for $42.00 per bottle and Ocean Breeze, for $30.00 per bottle. The forecasted monthly demand for Ocean Breeze is 12,000 bottles and is estimated to increase by 15 bottles for each $1 spent on advertising. A monthly budget of $100,000 is available for both advertising and purchase of the fragrances. Develop and solve a linear optimization model to determine how much of each type of perfume should be produced to maximize the net profit. Study the problem ?Beverly Ann Cosmetics? and the attached spreadsheet CosmeticsData.xlsx. Complete the linear program: compute item profit for each perfume; compute monthly profit; enter maximum monthly budget for advertising and purchases. Determine the optimal solution. Run sensitivity analysis. Answer the case questions. Take Quiz 2

Decision Variables: Summer Passion Ocean Breeze Production 5590 14990 Advertisement $199.50 Objective Function: Item costs Item price $5.25 $4.70 Advertisement expenditures: Max sales profit Summer Passion Constraints: Min production requirement for Summer Passion Max production requirement for Summer Passion Demand on Summer Passion Demand on Ocean Breeze Budget constraint on advertising and purchase Item profit $42.00 $30.00 LHS: 5590 5590 5590 14990 $100,000.00 RHS: 6174 14406 7000 14993 Ocean Breeze Demand Forecast 7000 12000