1.Consider Big Jake's problem: Big Jake operates a 1200-acre ranch in Arizona.His principle activities are raising beef, wheat and alfalfa.The Arizona Water Authority has just given its water allotments for next year (Big Jake was allotted 2000 acre-feet) and Big Jake is busy preparing his production plan for next year.He figures that beef prices will hold at around $600 per ton and he will make a profit of $60 per ton. Wheat will sell at $1.60 per bushel and his profit will be $.60 per bushel.Best guesses are that he will be able to sell alfalfa at $34 per ton and make a profit of $10 per ton

Some technological features of Big Jake's operation are wheat yield, 50 bushels per acre; alfalfa yield, 3 tons per acre.Other features are given below.The variables are defined as follows:

ActivityCostsWater ReqmtsLand Reqmts

(acre-feet)(acres)

1 ac wheat$81.51.0

1 ac alfalfa302.51.0

1 ton beef400.1 0.05

The formulation of the problem with its solution is attached.

a.What would be Big Jakes optimal planning strategy to obtain the maximum profit?

Answer: _____________________________________________

b.What happens to the optimal planting policy if the profit of wheat doubles?

Answer: ____________________________________________________________________________________________________________________