Osman Yetim

Ece Din
Ali
Table of Contents
Why did we choose this case?........................................................................................................2
Definition of the Problem..............................................................................................................2
Acquiring Input Data..................................................................................................................... 3
The Steps to Solution.....................................................................................................................3
The Results..................................................................................................................................... 5
Sensitivity Analysis........................................................................................................................ 5
Recommendation............................................................................................................................ 8
References....................................................................................................................................... 8
Appendixes..................................................................................................................................... 9

Why did we choose this case?

Healthy nutrition is one of the most significant issues in todays world. Obesity has becoming more and
more dangerous problem all around the world and especially in America. The governments and the nongovernmental organizations constantly create and implement strategies for struggling this problem. Most
of the experts believe that main reason of the nutrition problems comes from the agricultural cultivation.
We think the conflict between the purpose of farmers or food producers which is always profit
maximization and requirements of being healthy is a crucial point in this case. Therefore, we wanted to
make a linear programming for agricultural planning in order to show how they make the production
process.

Definition of the Problem

We have 800 acres of land to produce orange, corn, peanut and sunflower. One of the most important
priorities of our production strategy is to use our land with full efficiency. We assume that other details
are. The specified details are below:
We have 4 different plants for our 4 different plant to produce. Naturally, each plant has different returns
and different requirements. It is not obliged to plant each product at the same amount.
The returns for each product is at the table below: (all of the data are measured in dollars):
Product

Revenue for each acre planted

Orange

26

Corn

20

Peanut

22

Sunflower

28

The cultivation costs and environmental costs are at the table below:
Cost per unit

Cost per unit

Fertilizer Need

Orange

12

Corn

14

6
2

Peanut

18

Sunflower

22

Also, there are of course operational requirement that oblige us to have some additional constraints:

Acres of orange, peanut and sunflower planted cannot exceed half of the entire field, however
planted corn can exceed.
Government regulation as to the quotas requires that acres of planted corn and sunflower
combined should at least be 360
Maximum fertilizer can be used on 800 acres cannot exceed 4000

Total budget is 1600

Our objective is to maximize our profit

Acquiring Input Data

Data regarding the quotas come from Ministry of Agriculture and Forests
Data regarding maximum proportion of acres come from production planning and operations
department
Financial data such as cost and profit comes from a management consultancy firm
to whom we had outsourced the task
The knowledge of acres occupied comes from surface survey results
International agreement clauses come from the United Nations

The Steps to Solution

Variable Name

What it means

X1

Number of acres of orange planted

X2

Number of acres of corns planted

X3

Number of acres of peanut planted

X4

Number of acres of sunflower planted

Objective function is:

Max 14 X1 + 6 X2 + 4 X3 + 6 X4

Fertilizer limit constraint is

6 X1+ 6 X2 + 4 X3 + 8 X4 4000
Budget constraint is
12 X1 + 14X2 + 18X3 + 22X4 16000
Acres of field constraint is
X1 + X2 + X3 + X4 = 800
Maximum proportion constraint is
X1 400
X3 400
X4 400
Government quota constraint is X2 + X4 360

The Results

X1 = 306.6667
X2 = 360
X3 = 0
X4 = 0
Profit: 6453

Sensitivity Analysis
INTT 321 TERM PROJE

What if we did not fertiliser quotas?

CT

Solution would be to plant 440 acres of orange and 360 acres of corns. Budget surplus? Change in
reduced cost? Change in shadow price? Change in revenue?

What if government increases corn plus sunflowers quota to 500?

Produce 300 acres of orange, 400 acres of corn, 100 acres of sunflower. Budget surplus? Change in

reduced cost? Change in shadow price? Change in revenue?

What is our consumers need 50 acres of sunflower and we should produce it in order
to fulfil their needs?

Add new constraint of X4 50

Budget surplus? Change in reduced cost? Change in shadow price? Change in revenue?

Recommendation
We should plant 306,6667 acres of orange and 360 acres of corn. We should not plant sunflower and
peanut.

References
We did not use any references.

Appendixes
Here is some further reading on ecological regulatory environment and also on organic food
trend.
http://en.wikipedia.org/wiki/Environmental_law
http://en.wikipedia.org/wiki/EU-Eco-regulation
http://www.foodnavigator-usa.com/Markets/US-organic-food-market-to-grow-14-from- 2013-18
http://www.ats-sea.agr.gc.ca/inter/4367-eng.htm