Sharon owns an indoor/outdoor-decorating firm in North Dakota and needs white sand and raw cotton for a project for one of her biggest customers. She needs 20,000 pounds of white sand and 6,000 pounds of raw cotton. A local supplier can sell her up to 15,000 pounds of white sand for $0.20 per pound and as much raw cotton as she wants for $0.50 per pound. One of the trucks that Sharon's company owns has just made a delivery in Key West, Florida, and is scheduled to return empty to North Dakota. Sharon has just found out that white sand can be purchased in Florida for $0.09 per pound and that raw cotton can be purchased in Alabama for $0.36 per pound. The amount the truck can carry is limited by weight restrictions to 10,000 pounds. Also, load balancing must be taken into consideration. To ensure proper weight distribution to maintain stability for the truck, the weight of the sand on the truck must be at least twice the weight of the raw cotton on the truck. Assume that the additional cost for picking up the sand and raw cotton and for the increased consumption of diesel fuel for the truck to carry the added weight can be ignored.

a) Formulate Sharon's problem as a linear program. Identify:

a) All decision variables

b) Objective function

c) All relevant constraints.

b) Using Excel Solver, optimize the LP model of part a). Using the Excel Answer Report identify the optimal procurement plan and all binding constraints. Please, include the Excel Answer Report table in your solution.

c) Answer the questions below and justify your responses:

1) Should Sharon negotiate a white sand volume beyond 15,000 with the local supplier?

2) How much would Sharon be willing to pay to decrease the project's white sand requirement from 20,000 to

i) 10,000 pounds?

ii) 5,000 pounds?

3) Can you quantify the economic cost of the constraint that forces the truck to use (at least) a 2:1 ratio to balance the load of white sand and raw cotton?

4) Would you recommend Sharon to rent an additional truck to ship white sand from Florida and raw cotton from Alabama?