The Olde English Tea Company makes two brands of tea, each ofwhich is a blend of tea leaves from several sources. Sophisticatedtea drinkers with sensitive noses respond more strongly than otherconsumers to a tea’s fragrance and taste, so that the firm’spremium brand commands a higher price than its standard brand. Thetable below lists information on the fragrance and taste ratings oftea leaves from the different sources, as well as the minimumquality standards for the firm’s two brands.

FragranceRating Taste Rating

Tea leaves from SourceA 90 85

Tea leaves from SourceB 85 90

Tea leaves from SourceC 80 75

Tea leaves from SourceD 75 80

Premium brand of Tea 85 84

Standard brand of Tea 77 81

Further, the costs and availability of the different sources oftea leaves is as follows:

PoundsAvailable $/pound

Tea leaves from SourceA 1500 1.05

Tea leaves from SourceB 2500 0.95

Tea leaves from SourceC 4000 0.80

Tea leaves from SourceD 5000 0.70

The total of the direct and indirect costs for preparing,packaging, and shipping each of the two brands of tea todistributors is $0.25 per pound. The wholesale selling price of theteas to the distributors is $2.05/pound for Premium and $1.50/poundfor Standard. The tea company can sell as much of each tea as itcan produce.

Answer the following questions regarding Olde English Tea.Modifications to the base model are to be considered individually,not cumulatively.

a. How much of each brand of tea should be produced?How much tea will be used from each source? How much will it costto purchase tea from each source, and in total? What will be thetotal profit? Which supplies of tea are exhausted, limitingprofit?

b. How would your answers to part a. change if only2000 pounds were available from source B?

c. How would your answers to part a. change if up to6000 pounds were available from source D?

d. How would your answers to part a. change if theleaves from source C only cost $.65/pound?

e. How would your answers to part a. change if theminimum taste rating for Standard tea was only 79?