Question

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11-34 OPTIMAL PRODUCTION MIX. Della Simpson Inc. sells two popular brands of cookies, Della’s Delight and Bonnie’s Bourbon. Della’s Delight goes through the Mixing and Baking Departments, and Bonnie’s Bourbon, a filled cookie, goes through the Mixing, Filling, and Baking departments.

LO 2, 3, 5                                                                             

Maximize $300D + $250 B where D = Della’s Delight and B = Bonnie’s Bourbon                                                   

Michael Shirra, vice-president of sales, believes that at the current price, Della Simpson can sell all of its daily production of Della’s Delight and Bonnie’s Bourbon. Both cookies are made in batches of 3,000 cookies. The batch times (in minutes) for producing each type of cookie and the minutes available per day are as follows:                                                                    

both cookies are made in batch of 3000 cookies batch time 1 min                                                                             

                Department Minutes                                                    

                                              Mixing Filling Baking                  

Della’s Delight                         30   0         10                        

Bonnie’s Bourbon                    15  15          15                        

Minutes available per day     660   270     300                                                                                                        

Revenue and cost data for each type of cookie are                                           

                                                           Della’s Delight    Bonnie’s Bourbon                                           

Revenue per batch                          $   475              $   375                                               

Variable cost per batch                         175                     125                                 

Contribution margin per batch           300                       250                                

Monthly fixed costs                        18,650                22,350  

(allocated to each product)                                                                                                         

Required                                                                            

1. Using D to represent the batches of Della’s Delight and B to represent the batches of Bonnie’s Bourbon made and sold each day, formulate Shirra’s decision as a linear programming model.                            

2. Compute the optimal number of batches of each type of cookie that Della Simpson Inc. should make and sell each day to maximize operating income.                                                                         

Answer 1

Answer:

1.) shown below

2.)operating income for D and B shall be $3,278 and $3,755

.

Explanation: