The Sweet Candy Company includes in its product line a number of different mixed nut products. The Chalet nut mix is required to have no more than 25 percent peanuts and no less than 40 percent almonds. The nuts available, their prices and their availabilities this month are as follows: price availabliity Peanuts 20 cents/lb. 400 lbs. Walnuts 35 cents/lb. No limit Almonds 50 cents/lb. 200 lbs. The Chalet mix sells for 90 cents per lb. At most 700 lbs. can be mixed per moth in questions (a), (b) below. a. Formulate and solve the appropriate model for this problem.
b. The company would like to incorporate into the analysis its second major mixed nut line, the Hovel line. The Hovel mix can contain no more than 60 percent peanuts and no less than 20 percent almonds. Hovel sells for 50 cents per lb. Modify your model appropriately and solve. What is the most scarce resource? By how much the profit contribution will increase if one more pound of:
(i) peanuts was available.
Similarly find if one more pound of (ii) almonds or (iii) walnuts was available.
c. Note in (b) that Hovel did not come into the optimal solution. What increase in the price of Hovel will it make it profitable? (Hint: use sensitivity analysis-objective row ranges)