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MODULE 2 Case Study

Case study

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Alyanah Saripada
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19 views3 pages

MODULE 2 Case Study

Case study

Uploaded by

Alyanah Saripada
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Observation:

Angel and Zooey do not have the necessary funds to have a full menu. To overcome this challenge they
decide to serve two full course meals of either fish or beef. They are trying to decide how many of dishes
of each should they make to add up to 60 meals because that is there maximum constraint. Angel and
Zooey are also trying to decide on whether to increase the price of fish from $12 and whether or not this
change in price would affect the current model they have for profit maximization. They are also trying to
decide on whether spending $30 on advertisement which leads to the amount of meals sold to increase
by 10. Also with the unreliable source of labor they want to know whether or not the reduction in hours
would have an effect on the profit level.

Definition of problem:

Angela and Zooey are opening a restaurant and do not have the funds to have a full menu. They decide
they are going to serve two full course meals with beef and fish. The key challenges for Angela and
Zooey are how many meals they should prepare each night and whether or not they should change the
same amount of money for each meal. Later on they debate on investing in placing and advertisement in
the newspapers and how much staff they really need to have on board. Lastly, they debate on if they
should raise the price of fish, and wonder if it will affect the demand. They are not sure if their chief will
allow this to happen ad how will it affect their profit. Long term they should purchase some advertising,
have less staff, and change the price of fish, without affecting the chiefs plans.

Model construction

The decision variables in this problem are how many meals of fish and beef to prepare. The quantities to
be produced are representing as:

XType equation here .x1 = Fish

x2 = Beef

The linear programing model formulation used is maximize Z= $12x1 + $16x2. The formula will be used
as an objective function that will maximize the number of meals Angela and Zooey should prepare each
night.

Z= total profit per day

$12x1= profit from fish

$16x2= profit from beef

Model Solution:

Linear Programming Model

Maximize= Z =$12x1 + 16x2

Maximum meals each night

x1 + x2 Type equation here .x1 + x2 ≤ 60

Labor in minutes to prepare meals


15x1 + 30x2 ≤ 1200 or. 25x1+. 50x2 ≤ 20
Will sell at least three fish or two beef meal
2x1-3x2 ≥ 0 or x1/x2 ≥ 3/2
At least 10% will order beef
. 90x2-. 10x1 ≥ 0 or x2/(x1+x2) ≤. 10
Non negativity
x1≥0
x2≥0

The graphical solution is shown as follows


A: x1=34. 3
x2=22.8
Z=$776.23

B: x1=40
x2=20
Z=$800 optimal

C: x1=6
x2=54
Z=$744

If Angela and Zooey increased the menu price on the fish dinner so that the profit for
both dinners was the same, what effect would that have on their solution? Suppose
Angela and Zooey reconsidered the demand for beef dinners and decided that at least
20% of their customers would purchase beef dinners. What effect would this have on
their meal preparation?
If we were to change the objective function Z=$16x1 + 16x2 there would be optimal solutions (b
and C). For both solutions the profit would be $960.
16(40) + 16(20)= $960
16(6) + 16(54)= $960
If we changed the constraint form 90x2-. 10x1 ≥ 0 to 80x2-. 20x1 ≥ 0 it would have no effect on
the solution because it would not change the optimal point on the graph.
Raising the price from $12 to $14 would be acceptable to Pierre and there would e $80 per
night.
Original profit: $80
New profit: (14*40) + (16*20)= $880
$880-$800= $80
Keeping the price at $12 would yield profit of $800 while changing the price would yield o $880

Implementation:
Angel and Zooey should serve 40 fish meals and 20 beef meals per night, this is the quantity at
which profit is maximized (when price of fish=12 and price of beef=16, profit=800). We also
recommend increasing the price of fish to $16. By charging the same amount for both meals
profit rises from $800 to $960 (40*16+20*16=960).

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