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Test Paper

455 words - 2 pages

Julia is considering leasing a food booth outside Tech Stadium at home (6) football games.
If she clears $1000 in profit for each game she believes it will be worth leasing the booth.
$1000 per game to lease the booth
$600 to lease a warming oven
She has $1500 to purchase food for first game and will for remaining 5 games
She will purchase her ingredients with money made from previous game.
Each pizza costs $6 for 8 slices which is $0.75 per slice, and she will sell it for $1.50
Each hot dog costs $0.45, and she will sell it for $1.50
Each BBQ Sandwich costs $0.90, and she will sell it for $2.25

Total revenue Total ...view middle of the document...

75x1 + $1.05x2 + $1.35x3
There Z = total profit per game.

The oven size constraint is formulated as 16 shelves 3*4 feet each which will be filled twice for each game, so the maximum possible size of the stove is:
(((12*3)*(12*4))*16)*2 = 55,296 square inches.

Estimate for each item in regards to the space:

Pizza slice 24.5 square inches ((14*14)/8)
Hot dog 16 square inches
Barbeque sandwich 25 square inches

1. Julia would increase her profit if she borrowed some more money from a friend. The shadow price, is $1.50 for each additional dollar that she earns. The upper limit given in the model is $1,658.88, which means that Julia can only borrow $158.88 from her friend, giving her an additional profit of $238.32.

2. Julia should hire her friend for $100 per game. In order for Julia to prepare the hot dogs and barbeque sandwiches needed in a short period of time to make her profit, she needs the additional help. Also, with her borrowing the extra $158.88 from her friend, Julia would be able to pay her friend for the time spent per game helping with the food booth.

3. A major uncertainty that could play a factor in Julia’s analysis in weather. Weather is always un- predictable and it could be sunny one day and raining the next. If the weather is rainy, there may not be as big of a crowd as there is on a nice day. The weather might also be too cold or too hot and game patrons may not want to eat before and during half time.

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