TJ, Inc. makes three nut mixes for sale to grocery chains located in the Southeast. The three mixes, referred to as the Regular Mix, the Deluxe Mix, and the Holiday Mix, are made by mixing different percentages of five types of nuts. In preparation for the fall season, TJ, Inc. just purchased the following shipments of nuts at the prices shown: Type of Nut Shipment Amount (pounds) Cost per Shipment ($) Almond 6,200 7,500 Brazil 7,600 7,225 Filbert 7,600 6,750 Pecan 6,000 7,300 Walnut 7,600 7,875 The Regular Mix consists of 15% almonds, 25% Brazil nuts, 25% filberts, 10% pecans, and 25% walnuts. The Deluxe Mix consists of 20% of each type of nut, and the Holiday Mix consists of 25% almonds, 15% Brazil nuts, 15% filberts, 25% pecans, and 20% walnuts. An accountant at TJ, Inc. analyzed the cost of packaging materials, sales price per pound, and so forth, and determined that the profit contribution per pound is $1.70 for the Regular Mix, $2.05 for the Deluxe Mix, and $2.30 for the Holiday Mix. These figures do not include the cost of specific types of nuts in the different mixes because that cost can vary greatly in the commodity markets. Customer orders already received are summarized here: Type of Mix Orders (pounds) Regular 10,000 Deluxe 3,000 Holiday 5,000 Because demand is running high, it is expected that TJ, Inc. will receive many more orders than can be satisfied. TJ, Inc. is committed to using the available nuts to maximize profit over the fall season; nuts not used will be given to a local charity. Even if it is not profitable to do so, TJ, Inc.'s president indicated that the orders already received must be satisfied. Managerial Report Perform an analysis of the TJ, Inc.'s product-mix problem, and prepare a report for the president of TJ, Inc. that summarizes your findings. a) Cost Per Pound of the Nuts Included Regular mix, Deluxe mix , Holiday mix (in dollars). b) Optimal Product Mix and Total Profit Contribution Determine the optimal product mix (in pounds). Regular Deluxe Holiday c) Recommended Additional Purchasing Strategy Recommend how the total profit contribution can be increased if additional quantities of nuts can be purchased. (Give your answers in dollars per pound. Round your numerical values to two decimal places.) Based on the previous results we find that additional almonds are worth $ per pound, additional Brazil nuts are worth $ per pound, additional filberts are worth $ per pound, additional pecans are worth $ per pound, and additional walnuts are worth $ per pound. Which types of nuts would you recommend TJ, Inc. attempt to acquire. (Select all that apply.) AlmondBrazilFilbertPecanWalnut e) Evaluate Order Requirements Determine which order requirements would be worth attempting to renegotiate. (Select all that apply.) Regular Mix Deluxe Mix Holiday Mix

TJ, Inc. makes three nut mixes for sale to grocery chains located in the Southeast. The three mixes, referred to as the Regular Mix, the Deluxe Mix, and the Holiday Mix, are made by mixing different percentages of five types of nuts. In preparation for the fall season, TJ, Inc. just purchased the following shipments of nuts at the prices shown: Type of Nut Shipment Amount (pounds) Cost per Shipment ($) Almond 6,200 7,500 Brazil 7,600 7,225 Filbert 7,600 6,750 Pecan 6,000 7,300 Walnut 7,600 7,875 The Regular Mix consists of 15% almonds, 25% Brazil nuts, 25% filberts, 10% pecans, and 25% walnuts. The Deluxe Mix consists of 20% of each type of nut, and the Holiday Mix consists of 25% almonds, 15% Brazil nuts, 15% filberts, 25% pecans, and 20% walnuts. An accountant at TJ, Inc. analyzed the cost of packaging materials, sales price per pound, and so forth, and determined that the profit contribution per pound is $1.70 for the Regular Mix, $2.05 for the Deluxe Mix, and $2.30 for the Holiday Mix. These figures do not include the cost of specific types of nuts in the different mixes because that cost can vary greatly in the commodity markets. Customer orders already received are summarized here: Type of Mix Orders (pounds) Regular 10,000 Deluxe 3,000 Holiday 5,000 Because demand is running high, it is expected that TJ, Inc. will receive many more orders than can be satisfied. TJ, Inc. is committed to using the available nuts to maximize profit over the fall season; nuts not used will be given to a local charity. Even if it is not profitable to do so, TJ, Inc.'s president indicated that the orders already received must be satisfied. Managerial Report Perform an analysis of the TJ, Inc.'s product-mix problem, and prepare a report for the president of TJ, Inc. that summarizes your findings. a) Cost Per Pound of the Nuts Included Regular mix, Deluxe mix , Holiday mix (in dollars). b) Optimal Product Mix and Total Profit Contribution Determine the optimal product mix (in pounds). Regular Deluxe Holiday c) Recommended Additional Purchasing Strategy Recommend how the total profit contribution can be increased if additional quantities of nuts can be purchased. (Give your answers in dollars per pound. Round your numerical values to two decimal places.) Based on the previous results we find that additional almonds are worth $ per pound, additional Brazil nuts are worth $ per pound, additional filberts are worth $ per pound, additional pecans are worth $ per pound, and additional walnuts are worth $ per pound. Which types of nuts would you recommend TJ, Inc. attempt to acquire. (Select all that apply.) AlmondBrazilFilbertPecanWalnut e) Evaluate Order Requirements Determine which order requirements would be worth attempting to renegotiate. (Select all that apply.) Regular Mix Deluxe Mix Holiday Mix

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

See similar textbooks

Type of Nut	Shipment Amount (pounds)	Cost per Shipment ($)
Almond	6,200	7,500
Brazil	7,600	7,225
Filbert	7,600	6,750
Pecan	6,000	7,300
Walnut	7,600	7,875

Type of Mix	Orders (pounds)
Regular	10,000
Deluxe	3,000
Holiday	5,000

Managerial Report

Perform an analysis of the TJ, Inc.'s product-mix problem, and prepare a report for the president of TJ, Inc. that summarizes your findings.

a) Cost Per Pound of the Nuts Included

Regular mix, Deluxe mix , Holiday mix (in dollars).

b) Optimal Product Mix and Total Profit Contribution

Determine the optimal product mix (in pounds).

Regular

Deluxe

Holiday

c) Recommended Additional Purchasing Strategy

Recommend how the total profit contribution can be increased if additional quantities of nuts can be purchased. (Give your answers in dollars per pound. Round your numerical values to two decimal places.)

Based on the previous results we find that additional almonds are worth $ per pound, additional Brazil nuts are worth $ per pound, additional filberts are worth $ per pound, additional pecans are worth $ per pound, and additional walnuts are worth $ per pound.

Which types of nuts would you recommend TJ, Inc. attempt to acquire. (Select all that apply.)

AlmondBrazilFilbertPecanWalnut

e) Evaluate Order Requirements

Determine which order requirements would be worth attempting to renegotiate. (Select all that apply.)

Regular Mix

Deluxe Mix

Holiday Mix

Expert Solution

Step 1

Type of Nut	Shipment Amount (pounds)	Cost per Shipment ($)
Almond	6,200	7,500
Brazil	7,600	7,225
Filbert	7,600	6,750
Pecan	6,000	7,300
Walnut	7,600	7,875
	Total Cost of 1 shipment	36,650

Total cost of shipment ill be subtracted from the overall profit to determine the net profit.

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 8 images

SEE SOLUTION Check out a sample Q&A here