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The Sonoma Apple Products Company purchases apples from local growers and makes applesauce and apple juice. It costs $0.80 to produce a jar of applesauce
The Sonoma Apple Products Company purchases apples from local growers and makes applesauce and apple juice. It costs $0.80 to produce a jar of applesauce and $0.60 to produce a bottle of apple juice. The company has a policy that at least 20 percent but no more than 60 percent of its output must be applesauce. The company wants to meet but not exceed the demand for each product. The marketing manager estimates that the demand for applesauce is a maximum of 5,000 jars, plus an additional 3 jars for each $1 spent on advertising for applesauce. The maximum demand for apple juice is estimated to be 4,000 bottles, plus an additional 5 bottles for every $1 spent on advertising for apple juice. The company has $16,000 to spend on producing and advertising its two products. Applesauce sells for $1.75 per jar, and apple juice sells for $1.75 per bottle. (Hint - Start with building a data table). 1. Enter the model in Excel and use the Solver to find the optimal solution. After solving, create the answer & sensitivity report. (screen shots pasted on paper) 2. How many jars of applesauce and bottles of apple juice should they produce? 3. How much should they spend on advertising for applesauce and apple juice? 4. What will their profit be
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