Edwards Manufacturing Company purchases two component parts from three different suppliers. The suppliers
have limited capacity, and no one supplier can meet all the company’s needs. In addition, the suppliers charge
different prices for the components. Component price data (in price per unit) are as follows:
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Component 1 2 3 Production
1 $12 $13 $14 1,000
2 $10 $11 $10 800
Capacity 600 1000 800
Each supplier has a limited capacity in terms of the total number of components it can supply. However, as long
as Edwards provides sufficient advance orders, each supplier can devote its capacity to component 1, component
2, or any combination of the two components, if the total number of units ordered is within its capacity. Supplier
capacities and Edwards’ production plan are given above.
If the Edwards production plan for the next period includes 1000 units of component 1 and 800 units component 2. How many units of each component should be ordered from each supplier? What is the total purchased cost for the components?
Create the entire linear programming model below and plug into LINDO and interpret the results.
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