The Healthy Food Company manufactures two types of food: Sweet and Yummies. Each package of Sweet contains 2 pounds of cereal and 3 pounds of meat; each package of Yummies contains 3 pounds of cereal and 1.5 pounds of meat. Healthy believes it can sell as much of each food as it can make. Sweets sell for $2.80 per package and Yummies sell for $2.00 per package. Healthy’s production is limited in several ways. First, Healthy can buy only up to 400,000 pounds of cereal each month at $0.20 per pound. It can buy only up to 300,000 pounds of meat per month at $0.50 per pound. In addition, a special piece of machinery is required to make Sweets, and this machine has a capacity of 90,000 packages per month. The variable cost of blending and packing the food is $0.25 per package for Sweets and $0.20 per package for Yummies.

Required: Suppose your bonus is based on division profit, so you try to maximize its profit. How should you operate the division to maximize its profit and your salary?

Answer rating: 100% (QA)

Variation of decision We begin to identify those things we control the flexibility of the decision In this issue we have direct control of two of them ... View the full answer