Chapter 03 Homework La Jolla Beverage Products is considering producing a wine cooler that would be a blend of a white wine, a ros wine, and fruit juice. To meet taste specifications, the wine cooler must consist of at least 50% white wine, at least 20% and no more than 30% rose, and exactly 20% fruit juice. La Jolla purchases the wine from local wineries and the fruit juice from a processing plant in San Francisco. For the current production period, 10,000 gallons of white wine and 8,000 gallons of ros wine can be purchased; an unlimited amount of fruit juice can be ordered. The costs for the wine are $1.00 per gallon for the white and $1.50 per gallon for the rose; the fruit juice can be purchased for $0.50 per gallon La Jolla Beverage Products can sell all of the wine cooler it can produce for $2.50 per gallon a. Is the cost of the wine and fruit juice a sunk cost or a relevant cost in this situation? Relevant cost because the cost has not already been incurred. b. Formulate a linear program to determine the blend of the three ingredients that will maximize the total profit contribution. Solve the linear program to determine the number of gallons of each ingredient La Jolla should purchase and the total profit contribution it will realize from this blend. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. Enter "0" if your answer is zero. If the constant is "1" it must be entered in the box. Let W = gallons of white wine Let R = gallons of rose wine Let F = gallons of fruit wine Type here to search % white % rose minimum + FINNMM W + W % rose maximum % fruit juice Available white Available rose R SW, R, F20 Chapter 03 Homework If required, round your answers to the nearest whole number. Optimal Solution: Using rounded values from the Optimal Solution, round your answer for Profit Contribution to the nearest cent. Profit Contribution = $ C. If La Jolla could obtain additional amounts of the white wine, should it do so? If required, round your answers to the nearest cent. Yes If so, how much should it be willing to pay for each additional gallon, and how many additional gallons would it want to purchase? per White wine has a dual price of $ . This means that La Jolla Beverage should be willing to pay up to $ additional gallon of wine, the original price plus the dual price. Type here to search TA azon.com - Online Priceline.com * TripAdvisor bangtangoods YouTube nearest cent. No If so, how much should it be willing to pay for each additional gallon, and how many additional gallons would it want to purchase? gallons available and Ros wine has increase profit by $ gallons are being used. Therefore, adding a gallon of ros wine would e. Interpret the dual value for the constraint corresponding to the requirement that the wine cooler must contain at least 50% white wine. What is your advice to management given this dual value? If required, round your answer to the nearest cent. The constraint requiring producing no more than 50% white wine is a binding Jolla to use 50% plus one gallon of white wine would result in a decrease constraint. Increasing this constraint to require La in profit of $ f. Interpret the dual value for the constraint corresponding to the requirement that the wine cooler must contain exactly 20% fruit juice. What is your advice to management given this dual value? If required, round your answer to the nearest cent. Relaxing this constraint and allowing La Jolla to use 20% plus one gallon of fruit juice would result in an increase in profit of