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Frosty's has been able to negotiate a larger credit line with its supplier. So now it has a credit limit of $56,000. It has also
Frosty's has been able to negotiate a larger credit line with its supplier. So now it has a credit limit of $56,000. It has also expanded the storage capacity at its warehouse to 30,000 cubic feet. Figure 1 shows its optimal purchasing decisions with the improved line and the increased storage space.
What is the shadow price of the credit limit constraint?
Frosty Distributors Vegetable Whipped potatoes Creamed corn Black-eyed peas Artichokes Carrots Succotash Okra Cauliflower Green peas Spinach Lima beans Brussels sprouts Green beans Squash Broccoli Cost 2.15 2.20 2.40 4.80 2.60 2.30 2.35 2.85 2.25 2.10 2.80 3.00 2.60 2.50 2.90 Given Price 2.27 2.48 2.70 5.20 2.92 2.48 2.20 3.13 2.48 2.27 3.13 3.18 2.92 2.70 3.13 Data Min 300 400 250 0 300 200 150 100 750 400 500 100 500 100 400 Objective Decisions (Profit) (Cartons) Credit Space 0.12 1357.0 2.15 0.28 2000.0 2.20 900 0.30 900.0 2.40 150 0.40 150.0 4.80 1200 0.32 1200.0 2.60 800 0.18 800.0 2.30 600 -0.15 150.0 2.35 DI 300 0.28 300.0 2.85 3500 0.23 3500.0 2.25 2000 0.17 2000.0 2.10 3300 0.33 3300.0 2.80 500 0.18 500.0 3.00 0.32 3200.0 2.60 0.20 500.0 2.50 0.23 2500.0 LHS Max 1500 2000 3200 500 2500 Obj.Fn. = 5665.34 RHS Figure 1: Frosty Distributor's optimal solution. Constraints 2.90 56000
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