Mathematics, 09.03.2020 16:43 20vmiller
Klein Chemicals, Inc., produces a special oil-based material that is currently in short supply. Four of Klein's customers have already placed orders that together exceed the combined capacity of Klein's two plants. Klein’s management faces the problem of deciding how many units it should supply to each customer. Because the four customers are in different industries, different prices can be charged because of the various industry pricing structures. However, slightly different production costs at the two plants and varying transportation costs between the plants and customers make a "sell to the highest bidder" strategy unacceptable. After considering price, production costs, and transportation costs, Klein established the following profit per unit for each plant–customer alternative:
Customer
Plant D1 D2 D3 D4
Clifton Springs $160 $170 $160 $200
Danville $170 $150 $140 $190
The plant capacities and customer orders are as follows:
Plant Capacity (units) Distributor Orders (units)
Clifton Springs 10000 D1 4000
D2 10000
Danville 6000 D3 6000
D4 4000
How many units should each plant produce for each customer to maximize profits? Which customer demands will not be met? Show your network model and linear programming formulation.
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