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Maximum percentages of yellow grapes

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Reference no: EM13961218

Please illustrate each answer step with specific reasoning and logistics...

A wine producer has three types of wines it bottles and sells in the US. The wines are bottled under the names of Good, Better and Terrific. Each of the wines are mixed with different combination of grapes (Red, White, Yellow). The producer needs to blend appropriate portions of each grape type according to the below combinations. Because of contractual obligations a minimum percentages of the Red Grapes and maximum percentages of Yellow grapes are needed for each mixture. The producer is required to produce at least a specified minimum quantity of each wine type.

 

Minimum percent of Red Grapes allowed

Maximum percent of Yellow Grapes allowed

Minimum Quantity Required (liters)

Selling price

per liter

Terrific

70%

10%

100,000

$13.50

Better

20%

60%

100,000

$13.30

Good

0%

80%

100,000

$13.20

 

Red Grapes

White Grapes

Yellow Grapes

Maximum quantity available (liters)

1,000,000

1,200,000

700,000

Cost per liter

$12.00

$11.50

$11.00

How much would the refinery be willing to pay for one additional liter of the Yellow grapes beyond its current level?

Reference no: EM13961218

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