9 pts. 3. The Yummy Cereal Company produces a cereal called Nutri-munch, which they advertise as...

     

Transcribed Image Text:

9 pts. 3. The Yummy Cereal Company produces a cereal called Nutri-munch, which they advertise as meeting the minimum daily requirements for vitamins A and D. The production line uses two main ingredients in making the cereal - wheat and oat flour, both of which contain vitamins A and D. Given that each box of cereal must contain minimum amounts of vitamin A and D, the company has instructed you as the production manager to determine how many ounces of each ingredient should go into each box of cereal in order to keep costs down per box. Wheat flour contains 10 mg./oz. of vitamin A, and 7 mg./oz. of vitamin D. Oat flour contain 20 mg./oz. of vitamin A and 14 mg./oz of vitamin D. The minimum requirement of vitamin A is 125 mg., and the minimum requirement of vitamin D is 100 mg. The cost per ounce of wheat flour is $0.04, and the cost of oat flour is $0.06. Each box must contain a minimum of 12 oz. of wheat and/or oat flour so the cereal flakes have the right taste and consistency. 2pts. a) Describe in words the relevant economic graph and optimal decision rule for this problem. 9 pts. 3. The Yummy Cereal Company produces a cereal called Nutri-munch, which they advertise as meeting the minimum daily requirements for vitamins A and D. The production line uses two main ingredients in making the cereal - wheat and oat flour, both of which contain vitamins A and D. Given that each box of cereal must contain minimum amounts of vitamin A and D, the company has instructed you as the production manager to determine how many ounces of each ingredient should go into each box of cereal in order to keep costs down per box. Wheat flour contains 10 mg./oz. of vitamin A, and 7 mg./oz. of vitamin D. Oat flour contain 20 mg./oz. of vitamin A and 14 mg./oz of vitamin D. The minimum requirement of vitamin A is 125 mg., and the minimum requirement of vitamin D is 100 mg. The cost per ounce of wheat flour is $0.04, and the cost of oat flour is $0.06. Each box must contain a minimum of 12 oz. of wheat and/or oat flour so the cereal flakes have the right taste and consistency. 2pts. a) Describe in words the relevant economic graph and optimal decision rule for this problem.