Final Case Study Project

Final Case Study Project CJ foods, Inc is a company headquartered in South Korea. They make three types of sauces for sale to grocery stores located in East Asia. The three types of Korean BBQ sauces are referred to as Original, Pineapple and Hot & Spicy. They are made by mixing different percentages of five types of ingredients. CJ foods, Inc., purchased the following shipment of ingredients to prepare for the upcoming 2015 prices. The prices and shipment amounts (pounds) are shown in Table 1. Table 1: Prices and shipment amounts Type of Ingredients Shipment Amount(pounds) Cost per Shipment Beef Bean Pineapple Hot Pepper Sugar 8000 7100 7100 5800 7250 $6300 $6125 $6750 $8000 $9100 The Original sauce consists of 27% beef, 47% bean, 11% hot pepper, and 15% sugar. The Pineapple sauce consists of 10% beef, 25% bean, 50% pineapple, 10% hot pepper, and 5% sugar, and the Hot & Spicy sauce consists of 15% beef, 20% bean, 40% hot pepper, and 25% sugar. An accountant for CJ Food Inc., analyzes the cost of packaging materials, sales price per pound, and so forth, and determined that the profit contribution per pound is $1.55 for the Original sauce, $2.1 for the Pineapple sauce, and $2.35 for the Hot & Spicy sauce. These figures do not include the cost of specific types of ingredients in the different sauces because that cost can vary greatly in the commodity market. Customer orders already received are summarized in Table 2: Table 2: Order requirements Type of Sauce Orders (pounds) Original Pineapple Hot & Spicy 10000 3000 5000 Because demand is running high, CJ foods, Inc., expects to receive many more orders than can be satisfied. CJ foods, Inc., is committed to using the available ingredients to maximize profit over the next season. Using the information given above, perform a linear programming analysis of the CJ foods, Inc. product ingredient problem. Develop a case study report (at least 10 pages excluding table, results, equations, and graphs, etc.) to advise the President of CJ food, Inc. on the following issues (at the minimum): A. Optimal production for each type of sauce in the next season B. Is the purchase of additional pounds of each type of ingredients beneficial? C. Which is more beneficial to CJ foods, Inc? - an increase or a decrease in the order requirement for each type of product? Make sure your case study report includes the following structures: (1) Introduction, (2) Data Presentation, (3) Model Specification, (4) Interpretation of Results, (5) Integration of Biblical Principle, and (6) Policy Recommendations & Conclusion. 1. Introduction – Paper must define the problem scope and outline the objectives of the analysis in a clear, concise, and professional manner (1 page) 2. Data Presentation: Paper must present a summary of data in an accurate and professional manner, and provide accurate interpretation of the data. The calculation of cost for ingredient in three sauces should be provided accurately. (1 page) 3. Model Specification: Paper must specify the appropriate linear programming model in an accurate and professional manner. Provide details & accurate equations for objective functions, constraints and decision variables and their descriptions.(3 pages) 4. Interpretation of Results: Paper must provide a clear, concise, consistent and accurate summary of results from linear programming models. The results should be based on answer reports, and sensitivity reports (shadow price, allowable increase & allowable decrease, etc). The interpretations must be understandable to the general public. (2 pages) 5. Policy Recommendations & Conclusions: Paper must address policy recommendations and/or implications in the business world in a professional manner. In other words, students must provide a clear recommendation and plan of action that CJ Food, Inc. must take in their future decision making process, based on the results from a linear programming model(s). (2 pages) 6. Integration of Biblical Principle: Paper must identify and integrate biblical principles into the decision making process in an appropriate and insightful manner (1 page)