Question: A manager must decide how to best present a supply of regular coffee and premium coffee to its customers. Regular coffee can be sold by

A manager must decide how to best present a supply of regular coffee and premium coffee to its customers. Regular coffee can be sold by itself for a profit of $1.25 per bag. Premium coffee can likewise be sold at a profit of $2.50 per bag. To increase appeal to customers, one bag of each coffee can be bundled together and are then sold for a profit of $3.00 per bundle. The manager has 60 bags of regular coffee and 40 bags of premium coffee available each day. The manager has decided to stock at least 50 bags of regular coffee per day, and the demand for premium coffee is always at least 20 bags per day.

a) Explain what the decision variables are.

b) Formulate and show the models equations (standard form) of this LP problem.

c) Using Solver, solve your model, and interpret the results.

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