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BurhanSadiq PDF
BurhanSadiq PDF
Burhan Sadiq
December 3, 2009
Outline
Statement of Problem
Dilemma
LP Formulation
Results
Optimum Product Mix
Additional Grade A Tomatoes
Advertising Campaign
Tomato Juice Price Increase
Conclusion
Red Brand Canners
The company makes three different tomato products, and they set
the selling prices of these products in light of the long-term
marketing strategy of the company.
Data
The company makes three different tomato products, and they set
the selling prices of these products in light of the long-term
marketing strategy of the company.
Moreover, the company uses a numerical scale to record the
quality of both the raw produce and prepared products. The scale
runs from 0 to 10 points, higher numbers representing better
quality. On this scale, Grade A tomatoes were valued at 9
points/lb, and Grade B tomatoes 5 points/lb.
Data Cont.
Optimum Mix
Product Grade A Grade B
Whole Tomatoes 525,000 175,000
Tomato Juice 75,000 225,000
Tomato Paste - 2,000,000
Results
Optimum Mix
Product Grade A Grade B
Whole Tomatoes 525,000 175,000
Tomato Juice 75,000 225,000
Tomato Paste - 2,000,000
Marginal Values
Item Marginal Values ($/unit)
Grade A tomatoes 0.090
Grade B tomatoes 0.058
Demand of WholeTomatoes 0.000
Demand of Tomato Juice 0.000
Demand of Tomato Paste 0.403
Results
Optimum Mix
Product Grade A Grade B
Whole Tomatoes 525,000 175,000
Tomato Juice 75,000 225,000
Tomato Paste - 2,000,000
Marginal Values
Item Marginal Values ($/unit)
Grade A tomatoes 0.090
Grade B tomatoes 0.058
Demand of WholeTomatoes 0.000
Demand of Tomato Juice 0.000
Demand of Tomato Paste 0.403
Given that the Marginal Values at the optimum product mix are:
Marginal Values
Item Marginal Values ($/unit)
Grade A tomatoes 0.090
Grade B tomatoes 0.058
Demand of Whole Tomatoes 0.000
Demand of Tomato Juice 0.000
Demand of Tomato Paste 0.403
Marginal Values
Item Marginal Values ($/unit)
Grade A tomatoes 0.085
Grade B tomatoes 0.074
Demand of Whole Tomatoes 0.000
Demand of Tomato Juice 0.085
Demand of Tomato Paste 0.000