A firm is considering importing some products to sell in a local market. The unit price and cost for product i are p; and Cį, respectively. While the prices may be determined by the firm, the costs are given and fixed. For product i, the demand volume is Aį – Bipi, where A; and Bi are all given. The amount of budget that may be used to purchase all products is K. The demand volume may be fractional. Formulate a mathematical program that can find a purchasing plan that maximizes the firm's profit. Determine whether your program is an LP, IP, or NLP.

A firm is considering importing some products to sell in a local market. The unit price and cost for product i are p; and Cį, respectively. While the prices may be determined by the firm, the costs are given and fixed. For product i, the demand volume is Aį – Bipi, where A; and Bi are all given. The amount of budget that may be used to purchase all products is K. The demand volume may be fractional. Formulate a mathematical program that can find a purchasing plan that maximizes the firm's profit. Determine whether your program is an LP, IP, or NLP.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter7: Nonlinear Optimization Models

Section: Chapter Questions

Problem 46P

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