Juiceco manufactures two products: premium orange juice and regular orange juice. Both products are made by combining two types of oranges: grade 6 and grade 3. The oranges in premium juice must have an average grade of at least 5, those in regular juice, at least 4. During each of the next two months Juiceco can sell up to 1,000 gallons of premium juice and up to 2,000 gallons of regular juice. Premium juice sells for $1.00 per gallon, while regular juice sells for 80¢ per gallon. At the beginning of month 1, Juiceco has 3,000 gallons of grade 6 oranges and 2,000 gallons of grade 3 oranges. At the beginning of month 2, Juiceco may purchase additional grade 3 oranges for 40¢ per gallon and additional grade 6 oranges for 60¢ per gallon. Juice spoils at the end of the month, so it makes no sense to make extra juice during month 1 in the hopes of using it to meet month 2 demand. Oranges left at the end of month 1 may be used to produce juice for month 2. At the end of month 1 a holding cost of 5¢ is assessed against each gallon of leftover grade 3 oranges, and 10¢ against each gallon of leftover grade 6 oranges. In addition to the cost of the oranges, it costs 10¢ to produce each gallon of (regular or premium) juice.
Formulate an LP that could be used to maximize the profit? (revenues costs) earned by Juiceco during the next two months.
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