Question: A coffee company blends four component beans into three final blends of coffee: one is sold to luxury hotels, another to restaurants, and the third

A coffee company blends four component beans into three final blends of coffee: one is sold to luxury hotels, another to restaurants, and the third to supermarkets for store-label brands. The company has four reliable bean supplies: Argentine Abundo, Peruvian Colmado, Brazilian Maximo, and Chilean Saboro. The table below summarizes the very precise recipes for the final coffee blends, the cost and availability information for the four components, and the wholesale price per pound of the final blends. The percentages indicate the fraction of each component to be used in each blend.

Component (pounds)

Hotel

Rest

Market

Cost per pound

Max. weekly availability

Abundo

20%

35%

10%

$0.60

40,000

Colmado

40%

15%

35%

$0.80

25,000

Maximo

15%

20%

40%

$0.55

20,000

Saboro

25%

30%

15%

$0.70

45,000

Wholesale price per pound

$1.25

$1.50

$1.40

The processors plant can handle no more than 100,000 pounds per week, and Hill-O-Beans would like to operate at capacity, if possible. Selling the final blends is not a problem, although the Marketing Department requires minimum production levels of 10,000, 25,000, and 30,000 pounds, respectively, for the hotel, restaurant and market blends.

Using excel & the solver tool:

1.) To maximize weekly profit, how many pounds of each component should be purchased?

2.) How would the optimal profit change if there were a 1000-pound increase in the availability of Abundo beans? Colmado? Maximo? Saboro?

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