What are the decision variables and objective function

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Reference no: EM132227452

The Frisbee Pie company can make pie tins for bakeries, which are willing to pay ($48 - $2.55*Q1) per dozen, where Q1 is the number of dozens of pie tins. But the fraternities and sororities at the nearby university are willing to pay ($40 - $3.15*Q2) per dozen, where Q2 is the number of dozens of pie tins {to be used to throw around the front lawns of their houses}. It costs ($28 + $2.85*Q) to produce Q dozen tins. Management wants to maximize profit (i.e., revenue minus cost).

1. Explain this model in clear terms: what are the decision variables, what is the objective function, what are the constraints, etc? You can write out the algebraic formulation, but be sure to provide a contextual explanation as well, so that someone unfamiliar with optimization could still understand the model.

2. Build a spreadsheet model that implements the model you outlined in question 1. Find the optimal solution using Solver.

3. Answer the following questions about your solution:

(a) How many dozen (fractions are allowed) should be made for sale to the bakeries?

(b) What price per dozen should be charged for the ones sold to the bakeries?

(d) What price per dozen should be charged for the ones sold to the fraternities/sororities?

(e) What is the total profit?

Reference no: EM132227452

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