Question
Natasha's Flowers, a local florist, purchases fresh flowers each day at the local flower market. The buyer has a budget of $980 per day to
Natasha's Flowers, a local florist, purchases fresh flowers each day at the local flower market. The buyer has a budget of $980
per day to spend. Different flowers have different profit margins, and also a maximum amount the shop can sell. Based on past experience the shop has estimated the following NPV of purchasing each type:
NPV per bunch | Cost per bunch | Max. Bunches | |
Roses | $2 | $23 | 25 |
Lilies | $9 | $25 | 10 |
Pansies | $5 | $33 | 10 |
Orchids | $20 | $80 | 5 |
What combination of flowers should the shop purchase each day?
Question content area bottom
Part 1
The profitability index for each choice is: (Round to three decimal places.)
NPV per bunch | Cost per bunch | Max. Bunches | Profitability Index (per bunch) | |
Roses | $2 | $23 | 25 | enter your response here |
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