A farmer produces wheat and soy in his farm of 500 acres. Each acre of wheat pro
ID: 3892013 • Letter: A
Question
A farmer produces wheat and soy in his farm of 500 acres. Each acre of wheat produced will earn him a profit of $50 and each acre of soy will earn him a profit of $65. Planting wheat incurs an expense of $40 and soy $50. The farmer has initial investment funds of $30,500 for the work. (You can use Excel Solver)
What is the total profit the farmer makes?
a) 35,000
b) 32,500
c) 500
b) not enough information to solve this problem
9. In the above problem, what are the binding constraints?
a) the total land size
b) the initial investment funds
c) the profit of each product
d) all of the above
10. in the above problem, what’s your advice to the farmer?
a) get more land, if possible
b) get more investment funds, if possible
c) nothing can be changed
d) apple sauce
Explanation / Answer
On producing wheat,farmer will get profit=50 and his expense=40 that is per acre farmer will get profit of 50 / 40 = 1.25
On producing soy,farmer will get profit=65 and his expense=50 that is per acre farmer will get profit of 65 / 50 = 1.30 That is producing soy is more proffitable.
His farm is of 500 acres and his initial fund=30,500.
8) If he produces soy in 500 acre then it will cost him 500*50 = 25000 that is he will still be left with some amount.
Since soy will give him more profit and he has enough amount to invest in soy for 500 acres hence he will produce soy in his 500 acres field .
His profit = 65*500 = 32500
9) Say he produces wheat in x acre and soy in (500-x) acres.Here constraints are that 40*x + 50*(500-x) <= 30500
and we need to maximise profit that is 50*x + 65*(500-x)
Thus equation can be maximised by increaing the land size,initial investment and the profit
10) It is already explained that he is left with some initial amount which is of no use and if he has more land than he could use that left out money to produce more grains.Therefore if farmer has more land than he could gain more profit
Hope i have answered your question satisfactorily.Leave doubts in comment section if any.
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