ENGR $2050$ In$-$Class Exercise $24$

Refer to the production and distribution problem in the PPT slides and the Excel spreadsheet.

Because of labor shortages, the company has seen its cost rise. Production costs per gallon have risen to:

New Orleans: $$1\mathrm{.}10$

Gary: $$1\mathrm{.}15$

Buffalo: $$1\mathrm{.}30$

Portland: $$1\mathrm{.}50$

Shipping costs per gallon have risen to:

New Orleans Gary Buffalo Portland

MMI $$0\mathrm{.}26$ $$0\mathrm{.}14$ $$0\mathrm{.}19$ $$0\mathrm{.}20$

WWC $$0\mathrm{.}36$ $$0\mathrm{.}24$ $$0\mathrm{.}55$ $$0\mathrm{.}13$

TMC $$0\mathrm{.}14$ $$0\mathrm{.}22$ $$0\mathrm{.}25$ $$0\mathrm{.}24$

As a result, the company has decided to increase prices to the customers:

MMI: $$2\mathrm{.}20$

WWC: $$2\mathrm{.}90$

TMC: $$3\mathrm{.}30$

But due to the higher price and decreased demand, MMI is cutting their weekly order from $26,000$ to $20,000$ gallons$/$week$.$

If the other orders are unchanged $(13,000$ and $11,000$ gallons$/$week for WWC and TMC$,$ respectively$),$ what is the profit per week?

Now consider this variation: West Coast Corp.is seeing a large increase in customer orders, as their largest competitor is having difficulty getting materials from the Far East. As a result, they have agreed to buy as much product as is available, as long as their price is cut to $$2\mathrm{.}25/$gallon$.$ The other order quantities and prices remain the same as above.

If WWC$$s price is cut to $$2\mathrm{.}25/$gallon and there is no limit to how much they buy, what is the profit per week?