Decision Making Problem

For Problems 1-3 below, submit a non-technical consulting report (approximately ½ a page for each problem) accompanying by a technical appendix. The report should highlight your findings (e.g. business implications) and be prepared as if to be presented to an audience that has little knowledge of quantitative models. The technical appendix should include a formulation of a linear model, as we did in class (decisions, objective, constraints), and standard printouts of the spreadsheet model with an optimal solution (see Instructions for Standard Printouts below).
Problem 1: Perfume (30 marks)
Rylon Corporation manufactures Brute and Chanelle perfumes. Raw material costs $3 per pound. Processing a pound of raw material takes one hour of laboratory time, and yields 3 ounces of
Regular Brute and 4 ounces of Regular Chanelle perfume.
Regular Brute can be sold for $7/ounce and Regular Chanelle can be sold for $6/ounce.
Rylon has the option of further processing Regular Brute perfume to produce Luxury Brute perfume, selling for $18/ounce. Each ounce of Regular Brute processed requires additional 3 hours of laboratory time and yields one ounce of Luxury Brute at a cost of $4.
They can also process Regular Chanelle into Luxury Chanelle. Processing an ounce of Regular
Chanelle requires 2 additional hours of lab time and yields one ounce of Luxury Chanelle, again at a cost $4. Luxury Chanelle sells for $14/ounce.
Rylon has 4000 pounds of raw material on hand, and 6000 hours of lab time available.
How can they maximize their profit?

SKOLKOVO FT MBA

Problem 2: Production & advertisement (35 marks)
Your firm makes fluorescent paint pigments in four plants and ships them to four distributors
(abbreviated "D1" through "D4"), as follows:
Plant
Northeast
Southeast
Northwest
Southwest

Unit Shipping Cost To
D2
D3
Capacity Unit Cost Impurities D1
1000
$ 12.40 12
$ 1.20
$ 1.75
$ 2.35
1250
$ 11.55 15
$ 1.95
$ 1.35
$ 1.75
950
$ 10.85 18
$