Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help on these 3 questions thank you! One of the biggest issues facing this company is the rise in prices of raw materials,

image text in transcribed

image text in transcribedI need help on these 3 questions thank you!

One of the biggest issues facing this company is the rise in prices of raw materials, especially the iconic almond, which due to drought in California has seen a price rise in recent years. In order to diversify their product line, Brown & Haley has started to expand its repertoire to including other nuts, such as cashews and macadamia nuts. They also have a project underway to test a new product line of packaged mixed nuts. Note that this scenario is fictional and the details do not represent actual operations of Brown \& Haley. The Scenario The company is considering three nut mixes for inclusion in the new product line: Regular Mix, Deluxe Mix, and Holiday Mix. Each mix is made from 5 nuts in different combinations: - The Regular Mix consists of 15% almonds, 25% Brazil nuts, 25% filberts, 10% pecans, and 25% walnuts - The Deluxe Mix consists of 20% of each type of nut - The Holiday Mix consists of 25% almonds, 15% Brazil nuts, 15% filberts, 25% pecans, and 20% walnuts An accountant at Brown \& Haley completed a cost analysis and determined that the profit contribution per pound is $1.65 for the Regular Mix, $1.90 for the Deluxe Mix, and $2.35 for the Holiday Mix. Different nuts come from different suppliers. They are shipped in bulk containers and ordering a partial container is not possible. The currently available container sizes and costs are as follows: One container of each of the types of nuts has been ordered and is on the way. The sales and marketing teams have projected that initial demand for the different types of mixes will be as follows: The president of Brown \& Haley wants to commit to producing enough of the various mixes to meet the projected initial demand, even if not immediately profitable, in order to introduce these new mixes to the market. 5. A supplier has offered us 1200 pounds of filberts for $950. Should these filberts be purchased? If yes, how much would profits increase? 6. The marketing department is proposing an upgrade to the packaging of the Holiday Mix that would decrease th profit contribution from $2.35 to $2.29 per pound. Would the number of pounds of each type of mix be changed in the optimal solution? (Note that the President would be impressed if you did not need to rerun Solver to answer this question) 7. If the President's requirement to meet the initial demand for each type of mix were eliminated would profitability be impacted? If so, by how much? One of the biggest issues facing this company is the rise in prices of raw materials, especially the iconic almond, which due to drought in California has seen a price rise in recent years. In order to diversify their product line, Brown & Haley has started to expand its repertoire to including other nuts, such as cashews and macadamia nuts. They also have a project underway to test a new product line of packaged mixed nuts. Note that this scenario is fictional and the details do not represent actual operations of Brown \& Haley. The Scenario The company is considering three nut mixes for inclusion in the new product line: Regular Mix, Deluxe Mix, and Holiday Mix. Each mix is made from 5 nuts in different combinations: - The Regular Mix consists of 15% almonds, 25% Brazil nuts, 25% filberts, 10% pecans, and 25% walnuts - The Deluxe Mix consists of 20% of each type of nut - The Holiday Mix consists of 25% almonds, 15% Brazil nuts, 15% filberts, 25% pecans, and 20% walnuts An accountant at Brown \& Haley completed a cost analysis and determined that the profit contribution per pound is $1.65 for the Regular Mix, $1.90 for the Deluxe Mix, and $2.35 for the Holiday Mix. Different nuts come from different suppliers. They are shipped in bulk containers and ordering a partial container is not possible. The currently available container sizes and costs are as follows: One container of each of the types of nuts has been ordered and is on the way. The sales and marketing teams have projected that initial demand for the different types of mixes will be as follows: The president of Brown \& Haley wants to commit to producing enough of the various mixes to meet the projected initial demand, even if not immediately profitable, in order to introduce these new mixes to the market. 5. A supplier has offered us 1200 pounds of filberts for $950. Should these filberts be purchased? If yes, how much would profits increase? 6. The marketing department is proposing an upgrade to the packaging of the Holiday Mix that would decrease th profit contribution from $2.35 to $2.29 per pound. Would the number of pounds of each type of mix be changed in the optimal solution? (Note that the President would be impressed if you did not need to rerun Solver to answer this question) 7. If the President's requirement to meet the initial demand for each type of mix were eliminated would profitability be impacted? If so, by how much

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Analysis For Financial Management

Authors: Robert C. Higgins

10th International Edition

007108648X, 9780071086486

More Books

Students also viewed these Finance questions

Question

What is meant by the term industrial relations?

Answered: 1 week ago