Show transcribed image text Eli Orchid has designed a new pharmaceutical product, Orchid Relief, which improves the night sleep. Before initiating mass production of the product, Eli Orchid has been market-testing Orchid Relief in Orange County over the past 9 weeks. Now that the daily demand for Orange County can be predicted with reasonable accuracy using the M3 model, the COO of the company decided to use it to optimize the production of the new drug. The daily demand values and production process data are recorded in the Excel file provided. The new pharmaceutical product that the company wishes to introduce, Orchid Relief, uses two new ingredients. At this stage, Eli Orchid can procure limited amounts of each ingredient. The company has 4500 pounds of ingredient 1 and 3600 pounds of ingredient 2 available for this week. Eli Orchid can manufacture the new product using any of its three existing processes that have different capabilities. The production with each of the processes is done in batches (a batch typically represents one full run of a machine from when it starts a task until it finishes it). Each batch of production by each of the processes uses different amounts of ingredients 1 and 2, and results in different number of units of Orchid Relief produced (note the difference between a batch and units of Orchid Relief produced). The table below outlines the cost per batch, amounts of the two ingredients required, and the number of units of Orchid Relief yielded per batch Cost of production per batch Ingredient 1 required per batch (pounds) Ingredient 2 required per batch (pounds Orchid Relief vielded per batch (units Process 1 14,000 180 60 120 Process 2 30,000 120 420 300 Process 3 $11,000 540 120 60 Eli Orchid needs to determine how many batches to produce with each process in the least costly way given the limited availability of the two ingredients. Also, the total production of Orchid Relief in units must be greater than or equal to the total forecasted demand (in units) for the following week. The COO of the company asked the analyst
Eli Orchid has designed a new pharmaceutical product, Orchid Relief, which improves the night sleep. Before initiating mass production of the product, Eli Orchid has been market-testing Orchid Relief in Orange County over the past 9 weeks. Now that the daily demand for Orange County can be predicted with reasonable accuracy using the M3 model, the COO of the company decided to use it to optimize the production of the new drug. The daily demand values and production process data are recorded in the Excel file provided. The new pharmaceutical product that the company wishes to introduce, Orchid Relief, uses two new ingredients. At this stage, Eli Orchid can procure limited amounts of each ingredient. The company has 4500 pounds of ingredient 1 and 3600 pounds of ingredient 2 available for this week. Eli Orchid can manufacture the new product using any of its three existing processes that have different capabilities. The production with each of the processes is done in batches (a batch typically represents one full run of a machine from when it starts a task until it finishes it). Each batch of production by each of the processes uses different amounts of ingredients 1 and 2, and results in different number of units of Orchid Relief produced (note the difference between a batch and units of Orchid Relief produced). The table below outlines the cost per batch, amounts of the two ingredients required, and the number of units of Orchid Relief yielded per batch Cost of production per batch Ingredient 1 required per batch (pounds) Ingredient 2 required per batch (pounds Orchid Relief vielded per batch (units Process 1 14,000 180 60 120 Process 2 30,000 120 420 300 Process 3 $11,000 540 120 60 Eli Orchid needs to determine how many batches to produce with each process in the least costly way given the limited availability of the two ingredients. Also, the total production of Orchid Relief in units must be greater than or equal to the total forecasted demand (in units) for the following week. The COO of the company asked the analyst
