Profit Maximization Assignment
Harry & David’s Co. buys oranges and processes them into gift fruit baskets and fresh juice. The company grades the fruit it buys on a scale from 1 (lowest quality) to 5 (highest quality). The following table summarizes the company’s current inventory level of fruit.
|Supply (1000’s of lbs)||90||225||300||100||75|
Each pound of oranges devoted to fruit baskets results in a marginal profit of $2.50, whereas each pound devoted to fresh juice results in a marginal profit of $1.75. The company wants the fruit in its baskets to have an average quality grade of at least 3.75 and its fresh juice to have an average quality grade of at least 2.50.
Use Solver to determine how many oranges of each grade should be used in fruit baskets and fresh juice to maximize Harry & David’s profit. Get Operations Management homework help today