...Case Study: RED BRAND CANNERS Vice President of Operations Mr. Michell Gorden Controller Mr. William Copper Sale Manager Mr. Charles Myers Production Manager Mr. Dan Tucker Purpose: Decide the amount of tomato products to pack at this season. Tomato Products Whole Tomato Tomato Juice Tomato Paste Information: 1. Amount of Tomato: 3,000,000 pounds to be delivered. Tomato quality: 20% (grade A) × 3,000,000 = 600,000 pounds 80% (grade B) × 3,000,000 = 2,400,000 pounds (provided by production manager) 2. Demand forecasts & selling prices (provided by sale manager): Products Demand Whole canned tomato no limitation Others Refer Exhibit 1 1 lbs. correction (800,000/18) = 44444.5 Cases Selling prices has been set in light of the long-term marketing strategy of the company. Potential sales have been forecasted at these prices. 3. Purchasing price & product profitability (provided by controller) Purchasing price 6cents/pound Net profit Refer Exhibit 2 Grade A 9 points Grade B 5 points Product Minimum requirement Whole tomato 8 points Tomato juice 6 points Tomato paste 5 points (without grade A) 2 3.8 -(0.54+0.26+0.38+0.77) = 1.85 4.0-(1.18+0.24+0.4+0.7) = 1.48 4.5 - (1.32+0.36+0.85+0.65) = 1.32 0.3 5. 80,000 pounds of grade "A" tomatoes are available at 8.5 cents per pound. (provided by the Vice president of operations) 6. Sale manager re-computes the marginal profits (Exhibit 3). Linear Programming Solutions (a)...
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