Case Problem Walsh's Juice Company
W
alsh's Juice Company produces three products from unprocessed grape juice-bottled juice, frozen juice concentrate, and jelly. It purchases grape juice from three vineyards near the Great Lakes. The grapes are harvested at the vineyards and immediately converted into juice at plants at the vineyard sites and stored there in refrigerated tanks. The juice is then transported to four different plants in Virginia, Michigan, Tennessee, and Indiana, where it is processed into bottled grape juice, frozen juice concentrate, and jelly. Vineyard output typically differs each month in the harvesting season, and the plants have different processing capacities. In a particular month the vineyard in New York has 1,400 tons of unprocessed grape juice available, whereas the vineyard in Ohio has 1,700 tons and the vineyard in Pennsylvania has 1,100 tons. The processing capacity per month is 1,200 tons of unprocessed juice at the plant in Virginia, 1,100 tons of juice at the plant in Michigan, 1,400 tons at the plant in Tennessee, and 1,400 tons at the plant in Indiana. The cost per ton of transporting unprocessed juice from the vineyards to the plant is as follows: \table[[,Plant],[Vineyard,Virginia,Michigan,Tennessee,Indiana],[New York,
$850
,
$720
,
$910
,
$750