Your paint inventory consists of 60 gallons of blue, 40 gallons of red, and 30 gallons of yellow. To make purple paint you mix equals parts of blue and red. To make orange paint you mix equal parts of red and yellow. To make green paint you mix equal parts of blue and yellow. Purple paint sells for $6 a gallon, orange for $20, and green for $9.
There is a fixed disposal charge for every unused gallon. How much of each of purple, orange, and green paint should you mix to maximize profits if the disposal cost is (a) $4 per gallon, and (b) $6 per gallon.
While I don't know how to do the problem, Excel's Solver gives 60 gallons of orange and 20 gallons of purple maximizing profit when disposal cost is $4 per gallon, and the profit is $1120. With disposal at $6 per gallon, Excel maximizes profit at 10 gallons of orange, 70 of purple and 50 of green, giving $1070 of profit.

Posted by Charlie
on 20030512 03:47:07 