You will need to install the solver add-in in Microsoft Excel
Question:
Thanksmate makes three nut mixes for sale to grocery chains. The three mixes, referred to as the Regular Mix, the Deluxe Mix, and the Holiday Mix, are made by mixing different percentages of five types of nuts.
In preparation for the fall season, Thanksmate has just purchased the following shipments of nuts at the shown prices:
Type of Nut / Shipment Amount (pounds) / Cost per Shipment ($)
Almond / 6,000 / 7,500
Brazil / 7,500 / 7,125
Filbert / 7,500 / 6,750
Pecan / 6,000 / 7,200
Walnut / 7,500 / 7,875
The Regular Mix consists of 15% almonds, 25% Brazil nuts, 25% filberts, 10% pecans, and 25% walnuts.
The Deluxe Mix consists of 20% of each nut.
The Holiday Mix consists of 25% almonds, 15% Brazil nuts, 15% filberts, 25% pecans, and 20% walnuts.
The profit contribution per pound is:
Regular Mix: $1.65
Deluxe Mix: $2.00
Holiday Mix: $2.25
Orders are summarized here:
Type of Mix / Orders (pounds)
Regular / 10,000
Deluxe / 3,000
Holiday / 5,000
Because demand is running high, Thanksmate expects to receive more orders than can be satisfied.
Thanksmate is committed to using the available nuts to maximize profit over the fall season; nuts not used will be given to the homeless. But even if it is not profitable to do so, Thanksmate has indicated that the orders already received must be satisfied.
How to Answer:
Perform an analysis of Thanksmate's product mix, and prepare a report for me that summarizes your findings. Be sure to include information and analysis on the following:
1. The cost per pound of the nuts included in the Regular, Deluxe, and
Holiday mixes
2. The optimal product mix and the total profit contribution
3. Recommendations regarding how the profit contribution can be increased if additional nuts can be purchased
4. A recommendation as to whether Thanksmate should purchase an additional 1,000 pounds of almonds for $1,000
5. Recommendations on how profit contribution could be increased (if at all) if Thanksmate does not satisfy all existing orders
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