Find the optimal solution for this problem

Assignment Help Microeconomics
Reference no: EM13879193

The following exercise is a larger example of a local dairy market. There are three dairy cooperatives that produce the following amounts of raw milk on an annual basis: cooperative 1 (c1) produces 5 billion pounds of milk, cooperative 2 (c2) produces 4.808 billion pounds of milk, and cooperative 3 (c3) produces 12 billion pounds of milk. Each of the three cooperatives may sell any or all of their milk to two different cheese processors (p1 and p2) or to two different fluid milk bottlers ( f1 and f2). Assume that the cheese and fluid milk production functions are:
cheese = 1/10 raw milk, where cheese is in pounds, and every pound of raw milk produces 1/10 pound of cheese

fluid = 1/8.63 raw milk, where fluid is in pounds, and every pound of raw milk produces EXR1/8.63 gallons of fluid milk

Assume that both cheese processors and both fluid bottlers have unlimited capacity to handle and process any amount of raw milk. There are three supermarket chain stores that demand the following amounts of cheese and fluid milk each year: supermarket 1 (s1) needs 100 million pounds of cheese and 200 million gallons of milk, supermarket 2 (s2) needs 400 million pounds of cheese and 800 million gallons of milk, and super- market 3 (s3) needs 300 million pounds of cheese and 600 million gallons of milk. The following table summarizes the per unit transportation costs for raw milk and for cheese. cwt = 100 pounds.

From/To

(unit)

p1

p2

f1

f2

s1

s2

s3

c1

cwt

$0.50

$0.60

$0.95

$0.75

 

 

 

c2

cwt

$0.40

$0.30

$0.99

$0.89

 

 

 

c3

cwt

$0.87

$0.99

$0.75

$0.99

 

 

 

p1

lb

 

 

 

 

$0.02

$0.01

$0.03

p2

lb

 

 

 

 

$0.04

$0.06

$0.05

f1

gal

 

 

 

 

$0.34

$0.32

$0.41

f2

gal

 

 

 

 

$0.28

$0.29

$0.16

a. Write the LP tableau for this problem that minimizes total transportation costs of raw milk hauling from farm to the cheese-fluid plants and from cheese-fluid plants to the supermarkets.

b. Use Solver to find the optimal solution for this problem.

c. Summarize the optimal solution. What are the shipments from the cooperatives to the plants; from the plants to the supermarkets? Interpret the dual values (SPs) on the various nodes of the problem

Reference no: EM13879193

Questions Cloud

Article review assignment:search the csu online library : Help With BOS 3651Unit V Article Review Assignment:Search the CSU Online Library and locate an article related to hazard identification and control. The Business SourceComplete, Academic Search Complete, and Academic OneFile databases are good places..
Prepare a capital statement for partnership and stockholders : Prepare a capital statement for the partnership and a stockholders' equity statement for the corpora­ tion, as of December 31, 19X5.
Explain the effect of the environmental movement : Explain the effect of the environmental movement on the process of industrialization in the United States during the 1970s.
Relationship between dorothy and peter as portrayed : Write a paragraph about the relationship between Dorothy and Peter as portrayed in this chapter. Focus on Peter's influence on Dorothy and her newspaper
Find the optimal solution for this problem : Write the LP tableau for this problem that minimizes total transportation costs of raw milk hauling from farm to the cheese-fluid plants and from cheese-fluid plants to the supermarkets
Assume that the error is not discovered : 1.For each of the following inventory errors occurring in 2013, determine the effect of the error on 2013's cost of goods sold, net income,
Determining the horizontal wye fitting : The horizontal wye fitting in Fig splits the 20°C water flow rate equally, if Q1 = 5 ft3/s and p1 = 25 lbf/in2 (gage) and losses are neglected, estimate (a) p2, (b) p3, and (c) the vector force required to keep the wye in place.
Challenging the process : Please review this clip http://www.regent.edu/admin/media/fms/vod/bcovePlayerURL.cfm? (approximately 10 minutes) from the film, Remember the Titans. Coach Boone (Denzel Washington), the new head coach of a recently integrated high school football tea..
What are earnings per share for xyz common stockholders : The XYZ Corporation had income before taxes of $700,000 and paid $140,000 to the preferred stockholders. What are earnings per share for XYZ common stockholders with 70,000 shares of common stock outstandi ng?

Reviews

Write a Review

Microeconomics Questions & Answers

  Explain why the marginal revenue of a monopolist

Explain why the marginal revenue of a monopolist is below her demand curve. Please also indicate on the diagram below where the price elasticity of demand is elastic, unitary elastic and inelastic. Briefly explain why this is the case

  Firm in a merger avoid antitrust action by the government

How can a firm in a merger avoid antitrust action by the government?

  How much deposit the bank keep in reserves

How much of the $1000 deposit must the bank keep in reserves? How much can it loan out

  Discuss the effect of an increase in the tax rate

Discuss the effect (increase or decrease) of an increase in the tax rate, t, on the equilibrium income Y* using the effect of increasing t on the equilibrium solution.

  Suppose there is no beginning inventory find out how to

during the next four months a customer requires respectively 500 650 1000 and 700 units of a commodity and no

  Explain and analyse the companys action

Analyse the host country - Explain and analyse the companys action - What insights did you gain about international business in the contemporary context?

  Complete the table

Complete the table.

  Illustrate how the strategies relate to model of online

conduct research online of the various strategies used for marketing products and services in the online environment

  Customer surplus when the price is set to marginal cost

A natural monopoly has a cost function c (q) = 400 + 25q and market demand D (p) = 200 - 2p. What are the monopoly's profit, output, and customer surplus when the price is set to marginal cost? Average cost?

  Lets take a look at how we might model the eect of

lets take a look at how we might model the eect of increased income or wealth on peoples preferences for dierent kinds

  Magazine article highlights perfectly competitive situation

When thinking about the theory of the firm, shirking, and principle-agent problems, we can find analogous situations in our personal lives. Make a Power Point presentation (for sharing with the class) two personal situations to illuminate this con..

  Migration of labor from country b to country a

What will happen to wage rates in country A and country B because of the migration of labor from country B to country A and what will happen to domestic output in country A and country B after immigration?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd