You are to plan tequila production for the next period for the Simply Perfect (SP) distillery, which has now
been dedicated to the production of tequila for exporting to China. SP buys agaves that are already processed
(by the barrel) by 4 local companies – Baja, Guad J, Mexicali, and Jose. The processed agaves are
differentiated by PROOF (amount of alcohol on a 1 to 200 scale) and quality (a 1 to 100 scale).
SP wishes to blend together processed agave to make three kinds of tequila for the next production period –
white, yellow and gold. They can ultimately sell a barrel of white tequila for $60/barrel, yellow tequila for
$80/barrel and gold for $195/barrel. They can produce as much white tequila as profitable, but MUST produce
NO MORE than 100 barrels of yellow tequila and 50 barrels of gold tequila (they can produce less if it is not
All three tequila types INDIVIDUALLY are required to be at least 79 proof (that is, the average of the agave
mixed together should be at least 79 proof for each tequila considered separately). When blending the
processed agaves from the source companies, the barrels of white tequila produced must average at least “80”
on the quality scale, the yellow tequila average at least “87” in quality, and the gold, at least “95”.
The table below identifies important information needed in your model: the maximum you can purchase from
each individual farm/company, cost, quality and proof of purchasing processed agave from the four
aforementioned companies based on historical records, known facts, and educated guesses.
Farm Max Avail Cost/Barrel Quality Proof
Baja 200 33 70 82
Guad J 100 45 85 77
Mexicali 150 52 90 80
Jose 75 80 100 78
To ensure that the tequila has a ‘blended’ flavor, there are some composition requirements for the WHITE and
YELLOW tequila (but not GOLD). For WHITE, the agave purchased from one farm cannot make up more
than 40% of the total amount (in barrels) of WHITE produced. Additionally, each farm must contribute at
least 10% of the total amount of WHITE produced in barrels. Similarly for YELLOW, the agave purchased
from one farm cannot make up more than 50% of the total amount (in barrels) of YELLOW produced, while
each farm must contribute at least 10% of the total amount of YELLOW produced in barrels. (For example, if
there are 10 barrels of white tequila produced, at most 4 (40%) barrels can come from any one of the four
farms, but each farm must contribute at least 1 (10%) barrel.)
Finally, no farm can provide more than 100 barrels of agave to any ONE tequila. That is each farm to each
Find the most profitable way to mix together the agave from the 4 farms to produce the three types of tequila
for the next production period. You must use whole numbers of barrels IN YOUR DECISION VARIBLES.
Use an appropriate LP model approach. (FWIW Suggestion: Add integers last as you attack this problem
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