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11-34 OPTIMAL PRODUCTION MIX. Della Simpson Inc. sells two popular brands of cookies, Dellas Delight and Bonnies Bourbon. Dellas Delight goes through the Mixing and Baking Departments, and Bonnies Bourbon, a filled cookie, goes through the Mixing, Filling, and Baking departments.

LO 2, 3, 5

Maximize $300D + $250 B where D = Dellas Delight and B = Bonnies Bourbon

Michael Shirra, vice-president of sales, believes that at the current price, Della Simpson can sell all of its daily production of Dellas Delight and Bonnies Bourbon. Both cookies are made in batches of 3,000 cookies. The batch times (in minutes) for producing each type of cookie and the minutes available per day are as follows:

both cookies are made in batch of 3000 cookies batch time 1 min

Department Minutes

Mixing Filling Baking

Dellas Delight 30 0 10

Bonnies Bourbon 15 15 15

Minutes available per day 660 270 300

Revenue and cost data for each type of cookie are

Dellas Delight Bonnies Bourbon

Revenue per batch $ 475 $ 375

Variable cost per batch 175 125

Contribution margin per batch 300 250

Monthly fixed costs 18,650 22,350

(allocated to each product)

Required

1. Using D to represent the batches of Dellas Delight and B to represent the batches of Bonnies Bourbon made and sold each day, formulate Shirras decision as a linear programming model.

2. Compute the optimal number of batches of each type of cookie that Della Simpson Inc. should make and sell each day to maximize operating income.