Question:

Refer to the previous question and the answer and sensitivity reports generated by Solver. Whenever possible, answer the following questions by referring to the reports (rather than adjusting and re-solving the problem).

1. Fred has been offered a carbohydrate supplement by a national drug company representative. The supplement comes in liquid form and costs $0.23 per litre. Each litre added to the feed will reduce the daily requirement for carbohydrates by 60 grams per goat. Should Fred purchase the supplement? If yes, by how much will his daily profit increase?
2. A recent decision by the federal government to mandate a minimum requirement for ethanol in gasoline has resulted in an increase in demand and a consequent price increase for corn. (Ethanol is made principally from corn.) It looks as if the price increase will take corn to $1.02 per kilogram. Will this change Fred’s allocation of feed to his animals? How will it affect the daily profit that he sees from his herd?
3. How would you interpret the shadow price for vitamins in your solution?

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document