Question: I need help with number 3 Problem: A chocolate maker has contracted to operate a small candy counter in a fashionable store. To start with,

I need help with number 3

Problem:

A chocolate maker has contracted to operate a small candy counter in a fashionable store. To start with, the selection of offerings will be intentionally limited. The counter will offer a regular mix of candy made up of equal parts of cashews, raisins, caramels, and chocolates, and a deluxe mix that is one-half cashews and one-half chocolates, which will be sold in one-pound boxes. In addition, the candy counter will offer individual one-pound boxes of cashews, raisins, caramels, and chocolates.

A major attraction of the candy counter is that all candies are made fresh at the counter. However, storage space for supplies and ingredients is limited. Bins are available that can hold the amounts shown in the following table:

Ingredient Capacity (Pounds/Day)

Cashews 120

Raisins 200

Caramels 100

Chocolates 160

In order to present a good image and to encourage purchases, the counter will make at least 20 boxes of each type of product each day. Assume that demand of the candies is such that regardless of candy mix all candy will be sold every day. Formulate the problem in order to maximize profit.

The profit per box for the various items is as follows:

Item Profit per Box

Regular $.80

Deluxe $.90

Cashews $.70

Raisins $.60

Caramels $.50

Chocolates $.75

Deliverable 1 (10 points):

1. Give a typed formulation with decision variables clearly defined and all constraints clearly defined.

2. Solve the formulation in solver and save the Sensitivity Report.

3. Using Sensitivity Analysis: If you had $6.00 to spend and it cost $1.50 to increase capacity of cashews by one pound, $1.20 to increase capacity of raisins by one pound, $0.60 to increase capacity of caramels by one pound, and $0.30 to increase capacity of chocolates by one pound; how would you spend the $6.00 to maximize your return and what would be your net return? Explain your answer

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