Topic > Jp Molasses Business Analysis - 969

JP MolassesThe analysis is divided into three sections:Part I: Description of the optimization modelPart II: Solution of the current problemPart III: Recommendations on future improvements to increase profitsPart IObjective function: JP Molasses ' The goal is to maximize the profit generated by refining raw sugar into molasses and its byproducts and then shipping those products to customers. Decision variables: a. The amount of raw sugar shipped from eight suppliers to two processing plantsb. The amount of molasses and byproducts shipped to seven customers (most of which are internal and therefore do not generate profits accounted for in this model).c. Since these variables represent the amount shipped, they cannot be negative. Constraints: a. The total raw sugar shipped from each supplier to each refinery must be less than or equal to the quantity available for shipmentb. The total molasses shipped from each refinery to each customer must equal the quantity requested by that customer.c. The two processing plants must operate between 50 and 100 percent capacity. The amount of purified sugar produced at the Charleston plant is limited to 2,000,000 pounds per month due to storage constraints. The total molasses shipped to customers (including excess) must be less than or equal to the total molasses producedPart IIThere are two solutions that provide the optimal profit given the current constraints under which JP Molasses operates. Under these conditions, the optimal profit is $63,571. This profit margin is obtained in both cases with revenues of $942,354 and costs of $412,333 for purchased material and $466,450 for fixed and variable processing costs, for a total cost of $878,783. This optimal profit can be achieved with two different allocations of raw sugar shipments to processing plants, as follows: Cell Name Value from Answer 1 Value from Answer 2$B$6 Spectra Charleston 1000 160$C$6 Spectra Atlanta 0 840$B $9 Omega Charleston 530 1370