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Purchasing Recommendations

Purchasing Recommendations. Supply of almonds and walnuts will be depleted. Each extra pound of almond is worth $8.50 profit to TJ and each extra pound of walnut is worth $1.50 profit.

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Purchasing Recommendations

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  1. Purchasing Recommendations • Supply of almonds and walnuts will be depleted. Each extra pound of almond is worth $8.50 profit to TJ and each extra pound of walnut is worth $1.50 profit. • The almond profit contributions are applicable for an additional 583 pounds of almonds, the walnut contributions for an additional 250 pounds. • There is currently a remaining supply of the other three types of nuts.

  2. Purchasing Recommendations • Ideally, TJ should purchase 583 lbs of almonds for $583 (prorated price) from the supplier. This will change the optimal product mix to 11,666 lbs of regular mix, 17,916 lbs of deluxe mix and 5000 lbs of holiday mix, thereby increasing total profit to $29,300. ($66,333-$583-$36,450) • If not possible, TJ should still purchase the 1000 lbs of almonds at $1000. 417 lbs will not be used but profits will still be $28,883.

  3. Order Recommendations • Try to renegotiate the holiday mix orders as they hurt the profit objective by $0.175 per pound produced. • Do not renegotiate the regular or deluxe mix as it is desirable to produce more of these than currently ordered. • The order decisions are not affected by the almond purchase decision.

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