• Oct 12th 2011, 01:43 PM
tdotodot

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Question:
Even though they are in refrigerated storage, apples spoil at a rate of 20 kg/mo. The September price for apples is \$2.50/kg and increases \$0.25/kg each month. Storage costs are \$150/mo. and 1000 kg of apples are placed in storage in September. When should the apples be sold for maximum profit?

I have no idea where to start (Worried)
• Oct 12th 2011, 02:23 PM
TheEmptySet
Quote:

Originally Posted by tdotodot

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Question:
Even though they are in refrigerated storage, apples spoil at a rate of 20 kg/mo. The September price for apples is \$2.50/kg and increases \$0.25/kg each month. Storage costs are \$150/mo. and 1000 kg of apples are placed in storage in September. When should the apples be sold for maximum profit?

I have no idea where to start (Worried)

As with all word problems you need to orgainze what you know and come up with a plan. You may also want to compare to a similar, but easier problem.

Here is a start. Lets look at an ultra simplifed problem. What if the apples don't spoil, storeage is free and the price does not change. How would you calculate your Revenue?

Revenue= Profit - Cost =(Price per Kg)(# of Kg of apples) - 0

Well this won't work for the problem that you have, but it is a start!

Now that we have started, how can we "fix" the above model.

So a first step would be to fix the cost. Then keep "fixing" the formula until it models what you want.

Give this a try and post what you come up with.