Question

(******this is a quantatative analysis problem)The Scotty dog food company manufacturer’s three different grades of food, regular, light and premium. Regular grade sells for $17 a bag, light sells for $20 a bag and premium sells for $25 a bag. It costs $3, $6, and $10 in raw materials to produce each product respectively. The upper limit on demand for is product is 1,000 bags, 800 bags and 300 bags respectively. The company has allocated $100,000 for Raw material expenses. Formulate an LP model to maximize share holder wealth. (i need the excel formula)

Answer 1

the profits from each of the product is 14$, 14$, 15$ for regular light and premium respectively

this means that premium earns the most profit first allocate the resources for premium product's complete demand

that would be 10$*300= 3000$

and now the other two products are earning the same revenues so its better to allocate the resources to the product which has the highest demand that is product regular and allocate another 3000$

for light another 800*6=4800$ is required as the budget allocated is 100000$ it can be easily bought.

It is a simple mathematical problem in my opinion excel is not required