Question
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.
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 50% white wine, at least 25% and no more than 35% rose, and exactly 15% 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 8500 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.
- Is the cost of the wine and fruit juice a sunk cost or a relevant cost in this situation?
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 |
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