Case Study: RED BRAND CANNERS
Purpose:
Decide Mount of tomato products to pack at this season.
Information:
1. Amount of Tomato: 3,000,000 pounds
2. Tomato quality: 20% (grade A) 80% (grade B)
3. Demand forcasts & selling prices (provided by sale manager):
Products Whole canned tomato Others
Demand no limitation Refer Exhibit 1
Selling prices has been set in light of the long-term marketing strategy of the company. Potential sales has been forcasted at these prices.
4. Purchasing price & product profitability (provided by controller)
Purchasing price: 6cents/pound Net profit: Refer Exhibit 2
5. Production requirement (provided by production manager)
Average point(quality) of tomato
Grade A Tomato Grade B tomato
9 points 5 points
Product Whole tommato Tomato juice Tomato paste
Minimum requirement 8 points 6 points 5 points (without grade A)
6. Vice president: 80,000 pounds of grade "A" tomatoes are available at
8.5 cents per pound.
7. Sale manager recomputes the marginal profits(Exhibit 3).
Linear Programming Solutions"
(a) How to use the crop of 3,000,000 lbs. of tomatoes?
(b) Whether to purchase an additional 80,000 lbs. of A-grade tomatoes?
Part (a)
Formulation
Let
WA = lbs of A-grade tomatoes in whole.
WB = lbs of B-grade tomatoes in whole.
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