Reference no: EM131626897

Question: Juiceco manufactures two products: premium orange juice and regular orange juice. Both products are made by combining two types of oranges: grade 6 and grade 3. The oranges in premium juice must have an average grade of at least 5, those in regular juice at least 4. During each of the next two months Juiceco can sell up to 1000 gallons of premium juice and up to 2000 gallons of regular juice. Premium juice sells for $1.00 per gallon, while regular juice sells for $0.80 per gallon. At the beginning of month 1 Juiceco has 3000 gallons of grad 6 oranges and 2000 gallons of grade 3 oranges. At the beginning of month 2 Juiceco may purchase additional grade 3 oranges for $0.40 per gallon and additional grade 6 oranges for $0.60 per gallon. Juice spoils at the end of the month, so it makes no sense to make extra juice during month 1 in the hopes of using to meet month 2 demand. Oranges left at the end of month 1 may be used to produce juice for month 2. At the end of month 1 a holding cost of $0.05 is assessed against each gallon of leftover grade 3 oranges, and $0.10 against each gallon of leftover grade 6 oranges. In addition the cost of the oranges, it cost $0.10 to produce each gallon of (regular or premium) juice. Formulate an LP that could be used to maximize the profit (revenues - costs) earned by Juiceco during the next two months.