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COB 291Chapter 4My Extra ProblemsThe following problems are problems I developed as extra sensitivity problems. I have given you the problem statement, the formulation, Excel solver solution, sensitivity report, and a set of question for each problem. Youwill find this information on pages 1 through 3 of this document. On pages 4 and 5 you will find the answers tothe questions associated with each question.1)The Crazy Nut Company wishes to market two special nut mixes during the holiday season. Mix 1 contains½ pound of peanuts and ½ pound of cashews; mix 2 contains 3/5 pound of peanuts, ¼ pound of cashews, and 3/20 pound of almonds. Mix 1 sells for $1.49 per pound; mix 2 sells for $1.69 per pound.. The data pertinent to the raw ingredients appear in the table. Assuming that Crazy can sell all cans of either mix that it produces, formulate an LP model to determine how much of mixes 1 and 2 to produce.
a.Holding everything else as is, what would the profit on Mix 1 (X1) have to be in order to have alternativeoptima? Why?b.If we were to increase the pounds of cashews by 400 pounds, what would our profit become?c.How much would you be willing to pay for Peanuts? Why?d.Over what range of profit on mix 2 would shadow prices be valid? Why?e.We are considering introducing a new product, Mix 3. Mix 3 will require ½ lb of peanuts, ¼ lb of cashews, and ¼ lb of almonds. If we can sell mix 3 at a profit equal to the profit on mix 1 would you introduce it? How about if you could sell it for a profit equal to the profit on mix 2? Why?f.It seems that the cashew farmer realize that our constraining resource is cashews, and he is getting greedy. He has some extra cashews in inventory and is willing to sell them to us. Since he feels he has us over a barrow he has decided to triple the amount per pound (from $.050 to $1.50 per pound) he is