Unformatted text preview: 56 10. Iessica Lyell is the new owner of a Coffee Country Roasters. They roast and blend
coffee to sell on the internet. Their best sellers are “Best Blend” and “Economy
Blend” coffee. Both are blended from three basic grades of coffee: Best blend: 50% grade A, 20% grade B, and 30% grade C
Economy: 20% grade A, 50% grade B, and 30% grade C The market prices are $790/ton for Best and $700/ton for Economy. The ﬁrm is
given the option of buying up to 100 tons of grade A at $800/ton, 100 tons of
grade B at $600/ton, and 75 tons of grade C at $400/ton. The proﬁt on the Best
Blend is $150 per ton and the proﬁt on the Economy Blend is $120 per ton. Jessica would like to maximize her proﬁt. a. Formulate this problem as a linear program. b. Solve this problem using Excel Solver. (Turn in a copy of your spreadsheet and
the formulas used in it.) Using the sensitivity report from Solver, answer parts c—e. Do not resolve the prob—
lem to answer these questions. Treat each question separate from the others. c. The proﬁt on Economy Blend coffee has dropped by $10 due to a bad economy.
What impact will this have on our production plan and total proﬁt? (1. The bean broker just called to tell you that due to some ﬂooding only 80 tons
of grade B beans are available. How will this affect your production plan and proﬁt? 6. After you signed the contract for the purchase of beans according to your LP,
another broker sent you an e—mail offering 12 tons of grade C coffee beans for
a total of $3,000. You cannot buy less than 12 tons for this deal. Will you take
this deal? Will this affect your production plan and proﬁt? YES / NO ﬂﬂﬁﬁﬁﬁﬁﬂﬂﬂhﬁflllllﬁlllﬂﬂI-Iﬂ-Iﬂli ...
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- Spring '08