The Sonoma Apple Products Company purchases apples from local growers and makes
applesauce and apple juice. It costs $0.90 to produce a jar of applesauce and $0.65 to
produce a bottle of apple juice. The company has a policy that at least 20 percent but no
more than 65 percent of its output must be applesauce.

The company wants to meet but not exceed the demand for each product. The marketing
manager estimates that the demand for applesauce is 5000 jars, plus an additional 4 jars
for each $1 spent on advertising for applesauce. The demand for apple juice is estimated
to be 4000 bottles, plus an additional 5 bottles for every $1 spent on advertising for apple
juice. The company has $19,500 to spend on producing and advertising its two products.
Applesauce sells for $2 per jar, and apple juice sells for $1.50 per bottle.

Formulate a linear optimization model to help the company determine how many units of
each product to produce, and how much advertising to spend on each product, in order to
maximize profit. (You do not need to find the optimal solution).

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Answer rating: 100% (QA)

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