CASE ANALYSIS: JULIAS FOOD BOOTH

I.

DEFINE THE PROBLEM

Julia Robertson a senior at Tech University would like to investigate different

ways on how she can finance her final year at school. She is currently investigating
opening a food booth outside the Tech stadium at home football games.
Considering also the costs or expenses needed from opening the food booth, she
would want to maximize the profit that she can earn from this venture to finance
her final year at school. In doing so, she must consider what would be the optimal
number of products and resources she would need to produce in order to maximize
her profit. Ultimately, the case would like to understand whether or not it would be
optimal for Julia Robertson to open a food booth.
The following are also questions from the case that must be answered:
A. Formulate and solve a linear programming model for Julia that will help
you advise her if she should lease the booth.
B. If Julia were to borrow some money from a friend before the first game to
purchase more ingredients, could she increase her profit? If so, how much
should she borrow and how much additional profit would she make? What
factor constrains her from borrowing even more money than this amount?
C. When Julia looked at the solution in (A), she realized that it would be
physically difficult for her to prepare all the hot dogs and barbecue
sandwiches indicated in this solution. She believes she can hire a friend of
hers to help her for $100 per game. Based on the results in (A) and (B), is
this something you think she could reasonably do and should do?
D. Julia seems to be basing her analysis on the assumption that everything
will go as she plans. What are some of the uncertain factors in the model
that could go wrong and adversely affect Julias analysis? Given these
uncertainties and the results in (A), (B), and (C), what do you recommend
that Julia do?
II.

DEVELOP A MODEL

The model to be used for the given problem would be Linear Programming.
There are a number of constraints that are entailed in this case. One constraint
involves the budget of the person and whether or not she is financially able to enter
into this venture. Another constraint involves the space that is available for the
venture. Even with such constraints the main goal of maximizing profit must be
met. And therefore, Linear Programming is the best model to be used because it is
able to deal with problems containing different variables and also multiple
constraints.
III.

ACQUIRE INPUT DATA

Let:

X1 = Pizza Slice
X2 = Hotdog
X3 = Barbeque Sandwich

Objective Function:
Max Z = 0.75X1 + 1.05X2 + 1.35X3
Constraints:
Budget Constraint: 0.75X1 + 0.45X2 + 0.90X3 1,500
Space Constraint: 24.5X1 + 16X2 + 25X3 55,296
Other Constraints:
X1 X2 + X3
X2 2X3
X2 2X3 0
IV.

DEVELOP AND TEST THE SOLUTION

X1 = 1,250
X2 = 1,250
X3 = 0
Max Z = $ 2,250
Should she choose to borrow money prior to the first game (Ex. $1,000)

X1 = 1, 365.33
X2 = 1, 365.33
Max Z = $ 2,457.60
V.

ANALYZE THE RESULTS

Analyzing the results, it can be deducted that should Julia choose to
open a food booth to finance her final year at school she would optimize her

profit if her focus was on selling pizza slices and hotdogs for her to get a
maximum profit of $2,250. Now should she choose to borrow more money
prior to opening the food booth she could expect to increase her profit by
$257.60 however due to budget constraints this may limit her from doing so.
It would also be unfavorable for her to hire someone to help her with
the preparation of the hotdogs because that will add more to her expenses
and will not optimize her profit. Especially expecting that she will be required
a separate cost $1,100 per game ($1,000 space lease and $100 oven lease),
she cannot reasonably hire a friend at $100 per game because that will
decrease her maximum profit. It is also important to understand that Julias
analysis is based on the perfect conditions however she may not have
accounted for the fact that she may not be able to sell the number of
products she needs in order to maximize her profit. Multiple constraints such
as customer preference and stadium capacity may limit her customers and
the number of products that can be purchased from her. Therefore, it would
be advisable that she choose a different way of financing her final year of
school rather than opening a food booth because she will not optimize her
profit and it would not be enough for her to physically finance her final year
with the little amount of profit that she may make.