Question: Need step by step explanation with accurate solution 4) Recall the following problem and review its Sensitivity Report: Java Coffee Company blends four component beans

Need step by step explanation with accurate solution
Need step by step explanation with accurate solution 4) Recall the following
problem and review its Sensitivity Report: Java Coffee Company blends four component

4) Recall the following problem and review its Sensitivity Report: Java Coffee Company blends four component beans into three final blends of coffee: one is sold to luxury hotels, another to restaurants, and the third to supermarkets for storelabel brands. The company has four reliable bean supplies: Argentine Abundo, Peruvian Colmado, Brazilian Maximo, and Chilean Saboro. The table below summarizes the very precise recipes for the final coffee blends, the cost and weekly availablity information for the four components, and the wholesale price per pound of the final blends. The percentages indicate the fraction of each component to be used in each blend. The processor's plant can handle no more than 100,000 pounds per week, and Java would like to operate at capacity, if possible. Selling the final blends is not a problem, although the marketing department requires minimum production levels of 10,000 , 25,000 , and 30,000 pounds, respectively, for the hotel, restaurant, and market blends. Management would like to know how many pounds of each component should be purchased to maximize weekly profit. Using only the Sensitivity Report provided answer the following questionas a) Management received your recommendation about how many pounds of each component bean to purchase and noticed that Maximo should be ordered at the maximum availability level. Should they be able to negotiate an increase in supply by 5000lbs, how much should they be willing to pay for it? b) What if they can get an additional 10,000lbs of the Maximo beans? c) Management noticed that your recommendation does not achieve operation at capacity. They suggested increasing the minimum production of the Hotel blend by 10,000lbs. What is your expert opinion on this? d) Product development is considering a new blend, Contigo. The blend would have the following mix: Abundo (14\%), Colmado ( 26%), Maximo (20%) and Saboro (50%). Can you recommend a minimum wholesale price per pound for this new product? 4) Recall the following problem and review its Sensitivity Report: Java Coffee Company blends four component beans into three final blends of coffee: one is sold to luxury hotels, another to restaurants, and the third to supermarkets for storelabel brands. The company has four reliable bean supplies: Argentine Abundo, Peruvian Colmado, Brazilian Maximo, and Chilean Saboro. The table below summarizes the very precise recipes for the final coffee blends, the cost and weekly availablity information for the four components, and the wholesale price per pound of the final blends. The percentages indicate the fraction of each component to be used in each blend. The processor's plant can handle no more than 100,000 pounds per week, and Java would like to operate at capacity, if possible. Selling the final blends is not a problem, although the marketing department requires minimum production levels of 10,000 , 25,000 , and 30,000 pounds, respectively, for the hotel, restaurant, and market blends. Management would like to know how many pounds of each component should be purchased to maximize weekly profit. Using only the Sensitivity Report provided answer the following questionas a) Management received your recommendation about how many pounds of each component bean to purchase and noticed that Maximo should be ordered at the maximum availability level. Should they be able to negotiate an increase in supply by 5000lbs, how much should they be willing to pay for it? b) What if they can get an additional 10,000lbs of the Maximo beans? c) Management noticed that your recommendation does not achieve operation at capacity. They suggested increasing the minimum production of the Hotel blend by 10,000lbs. What is your expert opinion on this? d) Product development is considering a new blend, Contigo. The blend would have the following mix: Abundo (14\%), Colmado ( 26%), Maximo (20%) and Saboro (50%). Can you recommend a minimum wholesale price per pound for this new product

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