Optimization

_instruction..project_2_optimization_.docx

Home >Business & Finance homework help >Management homework help >Optimization

INFO 2020 Project 2

Overlooked Oils, headquartered in Idaho Springs, CO, makes a variety of perfumes from all natural essential oils. They maintain a supply of various oils, some of which are more costly than others. Each day, they mixed the appropriate ingredients for the varieties of perfumes they wish to make and packages them in their workshop.

Some of their bestselling perfumes are as shown in Table 1, along with the ingredients and the amount of each ingredient.

Perfume Name	Essential Oils needed - Ingredients (mL) per bottle
Fresh & Kicky	10 mL Grapefruit 10 mL Ginger 10 mL Vetiver
Wistful	10 mL Vetiver 5 mL Rose hips 15 mL Lime
Sensuous	5 mL Sweet Orange 20 mL Ylang-Ylang 5 mL Sandalwood
Loveswept	10 mL Jasmine 5 mL Clove 10 mL Vanilla 5 mL Rosemary
Lavender Twist	10 mL Lime 10 mL Rosemary 10 mL Lavender
Woodland	10 mL Sandalwood 5 mL Sage 5 mL Bergamot 5 mL Clove 5 mL Vanilla
Sweet Summer	5 mL Rose hips 5 mL Sweet Orange 5 mL Ylang-Ylang 10 mL Jasmine 5 mL Lavender
Sandalwood & Vanilla	5 mL Grapefruit 10 mL Sandalwood 5 mL Bergamot 10 mL Vanilla

Table 1: Perfume Recipes

Each bottle is sold for a retail cost of $10.00 per bottle. While price is the same no matter the variety, the cost of ingredients varies for each perfume is based on the type and amounts of oils in each. Table 2 shows the per-mL cost of each ingredient, and how much of each ingredient is in stock and available for mixing:

Essential Oil	Cost (per mL)	Availability in mL:
Grapefruit	0.04	2600
Ginger	0.04	2000
Vetiver	0.02	3500
Rose Hips	0.04	3000
Lime	0.05	5900
Sweet Orange	0.02	3000
Ylang-Ylang	0.03	10000
Sandalwood	0.04	15000
Sage	0.03	2500
Bergamot	0.06	3000
Jasmine	0.01	5330
Clove	0.02	5000
Vanilla	0.02	5500
Rosemary	0.04	5000
Lavender	0.02	7000

Table 2: Herbal Ingredients

Daily Conditions :

1. For inventory purposes, Overlooked Oils must produce at least 100 bottle of each perfume.

2. The supply of Bergamot has a limited shelf life, and Overlooked Oils should use 100% of their available Bergamot today in production. Each gram of Bergamot not used today still costs $.06, with no additional profits.

Project Part 1:

A. Set up a Linear Programming model to maximize profit. Identify the objective function and the formulas for all constraints.

B. Run the model, and provide a copy of your answer report.

C. In a summary, identify how many bottles of each perfume will be produced and how much of each oil will be left over in inventory.

D. For each type of perfume, identify the limiting factor(s) which prevented Overlooked Oils from making more of that perfume.

Project Part 2:

A. Maintenance problems have limited today’s production to exactly 1500 bottles total. Overlooked Oils would like to re-run their production model with this added limitation in mind to minimize total costs. Re-run your model and provide a copy of your answer report.

B. In a summary, identify how many bottles of each perfume will be produced and how much of each oil will be left over in inventory.

Project Part 3:

A. Assume the cost of sandalwood has doubled. Re-run your project Part 2 model (cost minimization) and provide a copy of your answer report.

B. In a summary, identify how many bottles of each perfume will be produced and how much of each ingredient will be left over in inventory. What impact did changing one cost make?

Assignment Deliverables:

Create a spreadsheet that helps to answer these questions. You will be submitting an excel spreadsheet in canvas by midnight of the due date.

1. Create a tab for each Project Part and produce an answer report within each tab.

2. Clearly answer each question that is associated with that part of the project.

3. Most importantly, create a separate tab as a dashboard with instructions on how to use the optimization you have created. It should have instructions on what things the Overlooked Oils Manager could change (Recipes? Costs? Inventories? Other things?). It should have instructions on how you ran the objectives to maximize profits or minimize costs with suggestions on what they could do to further these optimizations. It should be well organized, well labeled, easy to use, and easy to understand. Assume that the Manager who you are giving this to knows nothings about Optimization – walk them through each tab, highlighting important aspects.