Standard	Deluxe	A La Mode	Total
Contribution Margin	$ 125	$ 140	$ 130	$ 395
Time requirements per monthly meal plan & available monthly hours
Hours Required	Standard	Deluxe	A La Mode		Total hours available
Preparation	2	2	1		80
Cooking	2	2	3		130
Finishing	2	3	5		180
Freezing	1	1	0		60

Mamas Italian Food Company offers monthly service plans, providing prepared meals that are delivered to the customers homes and that need only to be heated in a microwave or conventional oven. The target market for these meal plans includes dual-income families with no children and retired couples in the upper income brackets.

Mamas offers three monthly plans: Standard cuisine, Deluxe cuisine, and A La Mode cuisine. The Standard plan provides frozen meals that are delivered once each month and generates a contribution margin of $125 for each monthly plan sold. The Deluxe plan provides vacuum sealed meals that are delivered twice each month and generates a contribution margin of $140 for each monthly plan sold. The A La Mode plan provides freshly prepared meals delivered daily and generates a contribution margin of $130 for each monthly plan sold.

REQUIRED: Part 1

1. Assume the only limiting capacity is cooking time, as depicted in the Excel table. Rank the monthly plans (1,2,3) based on optimizing Total Contribution Margin. Explain your answer.

REQUIRED: Part 2

Now assume all meals go through food preparation, cooking, and finishing steps in the companys kitchens. After these steps, the Standard and Deluxe meals are flash frozen. The time requirements per monthly meal plan and hours available per months are presented in the accompanying Excel file.

2. Using Excels Solver tool, determine the most profitable number (mix) of Standard, Deluxe, and A La Mode cuisine monthly meal plans to produce. Assume Mamas reputation provides the company with a market that will purchase all the meals that can be prepared., i.e., there is no limit on demand.

Problem 3. Product Mix Optimization (Linear Programming Solution), cont.

3. Mamas management anticipates certain elements of the decision analysis to change in the future. Consider each of these possible changes independently of the others.

a.1. How would the optimal mix change if the price for the A La Mode cuisine monthly plan were to be raised by $50 per plan sold?

a.2. How would the objective function value (i.e., Total Contribution Margin) you determined in #1 be affected by the change?

b. How would the optimal mix change if Mamas shifts 20 hours from cooking to preparation (i.e., available hours in Cooking decreases to 110 and available hours in Preparation increases to 100)? How would this change affect the objective function value (i.e., Total Contribution Margin)?