What are actual sales (in pounds of coffee) when demand is 27,000 pounds and you have 2 coffee roasting machines?

You are contemplating the establishment of a small artisanal coffee roasting business, and need to determine how many coffee roasting machines you should have.

A roasting machine has a maximum capacity of 10,000 pounds of coffee per year and costs $5,000 to rent per year. The lease for renting the machines can be renewed or cancelled in 1 year, and includes all maintainance costs.

Raw coffee beans are your only ingredient and cost $3.00 per pound. Additionally, it costs approximately $5.00 to roast and package a pound of coffee. Other fixed costs (including marketing, utilities, and administrative expenses) will add up to $3,500 per month.

You plan to charge an average of $15.00 per pound to your customers, but youre also interested in how different selling prices could change your profits.

However, the demand for your specialty coffee in the local market is uncertain. Your preliminary research suggests that the annual demand could range from 5,000 to 30,000 pounds. However, you will only produce as much roasted coffee as needed to meet demand.

In this assignment, you will build a model to determine how many roasting machines to rent and at what price to sell your coffee, in order to maximize your profit for the year.