Question: Galaxy Candy Company manufactures two popular candy bars, the Eclipse bar and the Nova bar. Both candy bars go through a mixing operation where the

Galaxy Candy Company manufactures two popular candy bars, the Eclipse bar and the Nova bar. Both candy bars go through a mixing operation where the various ingredients are combined, and the Coating Department where the bars from the Mixing Department are coated with chocolate. The Eclipse bar is coated with both white and dark chocolate to produce a swirled effect. A material shortage of an ingredient in the Nova bar limits

production to 300 batches per hour. Production and sales data are presented in the following table.

MixingCoating

Available capacity in hours525500

Use of capacity in hours per batch of product:

Eclipse1.52.0

Nova1.51.0

Management believes that Galaxy can sell all of its daily production of both the Eclipse and Nova bars. Other data follow:

EclipseNova

Selling price per batchP600P700

Variable cost per batch200450

REQUIRED:

a. Formulate the objective function and all of the constraints in order to maximize contribution margin.

b. How many batches of each type of candy bar (Eclipse and Nova) should be produced to maximize the total contribution margin?

c. Calculate the contribution margin at the optimal solution.

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