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Natasha's Flowers, a local florist, purchases fresh flowers each day at the local flower market. The buyer has a budget of

$990

per day to spend. Different flowers have different profit margins, and also a maximum amount the shop can sell. Based on past experience the shop has estimated the following NPV of purchasing each type:

	NPV per bunch	Cost per bunch	Max. Bunches
Roses	$1	$17	25
Lilies	$9	$30	10
Pansies	$6	$31	10
Orchids	$21	$76	5

What combination of flowers should the shop purchase each day?

The profitability index for each choice is: (Round to three decimal places.)

	NPV per bunch	Cost per bunch	Max. Bunches	Profitability Index (per bunch)
Roses	$1	$17	25	0.0590.059

(Round to three decimal places.)

	NPV per bunch	Cost per bunch	Max. Bunches	Profitability Index (per bunch)
Lilies	$9	$30	10	0.3000.300

(Round to three decimal places.)

	NPV per bunch	Cost per bunch	Max. Bunches	Profitability Index (per bunch)
Pansies	$6	$31	10	0.1940.194

(Round to three decimal places.)

	NPV per bunch	Cost per bunch	Max. Bunches	Profitability Index (per bunch)
Orchids	$21	$76	5	0.2760.276

(Select from the drop-down menus in descending order of their profitability-index

values.

Round the investment amounts to the nearest integer.)The combination of flowers the shop should purchase each day is

$nothing

of

lilies

roses

orchids

pansies

,

$nothing

of

roses

pansies

lilies

orchids

, and

$nothing

of

orchids

roses

lilies

pansies

.

Answer & Explanation Solved by verified expert

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