The Production Manager for the Whoppy Soft Drink Company Is

question 62

Essay

The production manager for the Whoppy soft drink company is considering the production of two kinds of soft drinks: regular (R) and diet (D). The company operates one 8-hour shift per day. Therefore, the production time is 480 minutes per day. During the production process, one of the main ingredients, syrup, is limited to maximum production capacity of 675 gallons per day. Production of a regular case requires 2 minutes and 5 gallons of syrup, while production of a diet case needs 4 minutes and 3 gallons of syrup. Profits for regular soft drink are $3.00 per case and profits for diet soft drink are $2.00 per case.
The formulation for this problem is given below.
MAX Z = $3R + $2D
s.t.
   2R + 4D ? 480
   5R + 3D ? 675
The sensitivity report is given below.
Adjustable Cells
$\begin{array}{lcccccc}\text { Cell } & \text { Name } & \begin{array}{c}\text { Final } \\\text { Value }\end{array} & \begin{array}{c}\text { Reduced } \\\text { Cost }\end{array} & \begin{array}{c}\text { Objective } \\\text { Coefficient }\end{array} & \begin{array}{c}\text { Allowable } \\\text { Increase }\end{array} & \begin{array}{c}\text { Allowable } \\\text { Decrease }\end{array} \\\hline \$ \mathrm{~B} \$ 6 && \text { Regular }=90.00 & 0.00 & 3 & 0.33 & 2 \\\hline \$ \mathrm{C} \$ 6 && \text { Diet }=75.00 & 0.00 & 2 & 4 & 0.2 \\\hline\end{array}$ Constraints
$\begin{array}{ccccccc}\text { Cell } & \text { Name } & \begin{array}{c}\text { Final } \\\text { Value }\end{array} & \begin{array}{c}\text { Shadow } \\\text { Price }\end{array} & \begin{array}{c}\text { Constraint } \\\text { R.H. Side }\end{array} & \begin{array}{c}\text { Allowable } \\\text { Increase }\end{array} & \begin{array}{c}\text { Allowable } \\\text { Decrease }\end{array} \\\hline\$ \mathrm{E} \$ 3 & \text { Production (minutes) } & 480.00 & 0.07 & 480 & 420 & 210 \\\hline \$\text { E } \$ 4 & \text { Syrup (gallons) } & 675.00 & 0.57 & 675 & 525 & 315 \\\hline\end{array}$
-if the company decides to increase the amount of syrup it uses during production of these soft drinks to 990 lbs. will the current product mix change? If show what is the impact on profit?

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Definitions:

APR

Annual Percentage Rate; the annual rate charged for borrowing or earned through an investment, inclusive of any fees or additional costs.

Monthly Payments

Regular payments made once a month, often in the context of loan repayments or leasing agreements.

Federal Direct Unsubsidized Loan

A type of federal student loan where the borrower is responsible for paying the interest that accumulates during all periods.

Capitalize Interest

The process of adding the interest accrued on a loan to the principal balance of that loan, effectively increasing the total amount owed.