This activity has the purpose of helping students to work on more challenging optimization models.
Guarionex Company sells bags of guavas and bottles of guava juice. The company grades the guava on a scale of 1 (poor) to 10 (excellent). Guarionex has on hand 80,000 lb. of grade 10 guavas and 130,000 lb. of grade 7 guavas. The average quality of guava sold in bags must be at least 8, and the average quality of the guavas used to produce guava juice must be at least 9. Each pound of guava that is used for juice yields revenue of $2.00 and incurs a variable cost of $1.25. Each pound of guava sold in bags yields revenue of $0.75 and incurs a variable cost of $0.25.
Formulate (show the standard form optimization model) and solve a model that helps Guarionex optimize profit. Explain the output of your model.