Blue Ribbon Foods

Blue Ribbon Foods - Nina Madison, Zizhen (Sarah) Wang, Chih...

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Nina Madison, Zizhen (Sarah) Wang, Chih Hsuan (Shen-Shen) Wu Blue Ribbon Foods Maximum Whole Tomato Production Allie Allen, the Production Manager, states that the whole tomato production is limited to 960,000 pounds. The following data and calculations support this claim: Table 2 Avg Quality Whole Tomato 7.5 Tomato Juice 6 Tomato A 9 Tomato B 5 Table 1 Percent Pounds Tomato A 20% 600,000 lbs Tomato B 80% 2,400,000 lbs Total 3,000,000 lbs Table 3 Demand Forecast (Cases) Pounds/Case Whole Tomato 800,000 18 Tomato Juice 50,000 20 Tomato Paste 80,000 25 The maximum amount of canned whole tomato production is produced when all 600,000 pounds of tomato A amounts to 62.5% of its volume. Haneda’s Solution – All Whole Tomatoes
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Nina Madison, Zizhen (Sarah) Wang, Chih Hsuan (Shen-Shen) Wu Although there is sufficient production capacity, it is impossible to produce only whole tomatoes because there isn’t enough of tomato A. Producing the maximum 53,333 cases of whole tomatoes uses all 600,000 pounds of tomato A and 360,000 pounds of tomato B. This leaves 2,400,000 - (960,000 - 600,000) = 2,040,000 pounds of tomato B, which with an average quality of 5 are too low quality to be used for whole tomatoes that require an average quality rating of 7.5. Therefore, in order to prevent waste, these excess pounds of tomato B can be turned into cases of tomato paste. Table 4: Financial Data per Case Whole Tomatoes Tomato Juice Tomato Paste Selling Price $12.00 $13.50 $11.40 Variable Costs Direct Labor $3.54 $3.96 $1.62 Variable OHD $0.72 $1.08 $0.78 Variable Selling $1.20 $1.55 $1.14 Packaging $2.10 $1.95 $2.31 Total Variable Costs
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This note was uploaded on 04/10/2012 for the course BUAD 311 taught by Professor Vaitsos during the Spring '07 term at USC.

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Blue Ribbon Foods - Nina Madison, Zizhen (Sarah) Wang, Chih...

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