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Alexandra CERISIER 5472100519
Chusak Deetrakunwattanapoen 7472100374
Case Study: Red Brand Gopi Krishna Pamula 7462100509
Canners Mohammad Faruk Ahmed 7472100333
Nam Doc Tran 7472100382
Sukana Sasiwachiranggool 7472100291
Varavut Nitistaporn 7472100127
Headings:
Outputs: Three tomato products: Canned whole tomatoes, Tomato juice, and Tomato
paste
Decision Variables:
1
LP models formulation and solutions for Optimum solution, Cooper’s
solution and Myers solution
1. OPTIMUM SOLUTION:
Objective Function:
MAXIMIZE PROFIT =
0.0822Wa + 0.0822Wb + 0.066Ja + 0.066Jb + 0.074Pa + 0.074Pb -180000
Calculation in detail:
Using Table 8.8 in the case study,
Tomato cost = 3,000,000 * $0.06 [Average rate 6 cents per pound from growers]
Total Tomato cost = $180,000
So, MAXIMIZE PROFIT = Profit excluding tomato cost – total tomato cost
= 0.0822Wa + 0.0822Wb + 0.066Ja + 0.066Jb + 0.074Pa + 0.074Pb –180,000
SUBJECT TO:
Quality Constraints:
QUALITY_WHOLE: Wa - 3.0Wb >= 0
QUALITY_JUICE: 3.0Ja – Jb >= 0
2
DEMAND_WHOLE: Wa + Wb <= 14400000 pounds [800,000*18 pounds]
DEMAND JUICE: Ja + Jb <= 1000000 pounds [50,000*20 pounds]
DEMAND_PASTE: Pa + Pb <= 2000000 pounds [ 80,000*25 pounds]
Availability Constraints:
AVAILABILITY_A: Wa + Ja + Pa <= 600000 [20% of the total 3,000,000
tomatoes]
AVAILABILITY_B: Wb + Jb + Pb <= 2400000 [80% of the total 3,000,000
tomatoes]
Non-negativity:
Wa, Wb, Ja, Jb, Pa, Pb >= 0
Optimum Solution:
3
2. SOLUTION BASED ON COOPER’S DATA:
Cooper’s Solution
4
3. SOLUTION BASED ON MYERS’S DATA:
If Red brand would purchased 80,000 pounds more tomatoes at the rate of 8.5
cents per pound, there would be following changes in objective function, constraints
and solution.
MAXIMIZE PROFIT =
0.0822Wa + 0.0822Wb + 0.066Ja + 0.066Jb + 0.074Pa + 0.074Pb –180000 –
(80000*0.085)
= 0.0822Wa + 0.0822Wb + 0.066Ja + 0.066Jb + 0.074Pa + 0.074Pb –186800
5
Therefore,, additional profit would be $ 45,764 - $45,340 = $424
DISCUSSION QUESTIONS:
6
1. Structure the problem verbally, including a written description of
constraints and objective. What are the decision variables?
Red Brand Canners is a medium-size company that cans and distributes tomato and
other fruits products. The tomatoes used as raw materials are of two different
qualities and must be combined in proportions that maximize the profitability of the
company and at the same time assure the quality requirements of the prepared
products. Therefore, maximize the profitability for the tomato products is the
objective function.
In this case study, the total amount of tomatoes in pounds is 3 millions where 20%
is grade A and rest is grade B. This availability is a constraint to get maximum
profit.
The demand in the market is forecasted by Sales Manager for three kinds of tomato
products – whole tomato, juice and paste and specified in the case study in table
8.6. This demand is also constraints as RBC should not produce more than the
demand.
The company also uses average minimum quality of tomato in different products – 8
points of whole tomato, 6 points for juice and 5 points for paste, where grade A
averaged 9 points and grade B averaged 5 points. This is also a constraint in
production in term of quality. There is also limit of whole tomato production
(800,000 pounds) due to insufficient of grade A tomatoes.
This has been already discussed in “LP models formulation and solutions for 1.
Optimum solution 2. Cooper’s solution 3. Myers solution” of this report.
3. Solve the problem and discuss the results.
We have found different results by solving based on Cooper’s and Myers data. We
have also found the different optimum solution for this case study. These results are
described in comparison table before. Actually Cooper and Myers calculated the
tomato cost in wrong way. Red Brand has already signed contract agreement to
purchase 3 millions pounds tomato at a cost of 6 cents average. Cooper and Myers
calculated tomato cost separately for grade A and B which had an impact in his
calculation. This is why their profit varied with the correct solution.