eBook ? Problem 8-29 (Algorithmic) La Jolla Beverage Products is considering producing a wine cooler that would be a blend of a white wine, a rose wine, and fruit juice. To meet taste specifications, the wine cooler must consist of at least 45% white wine, at least 25% 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, 11000 gallons of white wine and 7500 gallons of rose wine can be purchased; an unlimited amount of fruit juice can be ordered. The costs for the wine are $1 per gallon for the white and $1.5 per gallon for the rose; the fruit juice can be purchased for $0.5 per gallon. La Jolla Beverage Products can sell all of the wine cooler it can produce for $3 per gallon. a. Is the cost of the wine and fruit juice a sunk cost or a relevant cost in this situation? Relevant cost Explain. The input in the box below will not be graded, but may be reviewed and considered by your instructor. 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. If required, round your answers to one decimal place. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. Let W = gallons of white wine Let R = gallons of rose wine Let F = gallons of fruit wine Max 2 VW + 1.5 VR + 2.5 V F s.t. Previous Next Check My Workb. 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. If required, round your answers one decimal place. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. Let W = gallons of white wine Let R = gallons of rose wine Let F = gallons of fruit wine Max 2 VW + 1.5 VR + 2.5 V F s.t 0.8 X w + O XR + 7.5 X F O V % white O X W + 1 XR + 0.5 X F 2 O V % rose minimum O X W + 1 XR + O XF O V % rose maximum O X W + O X R+ 1 XF O V % fruit juice 1 VW IA 11000 V. Available white 1 VR IA 7500 Available rose W, R, F 20 Optimal Solution: 11000 R 5700 > 3800 X Profit Contribution = 22000 X c. If La Jolla could obtain additional amounts of the white wine, should it do so? Previous Next