A firm is considering importing some products to sell in a local market. The unit price and cost for product i are p; and C;, respectively. While the prices may be determined by the firm, the costs are given and fixed. For product i, the demand volume is A¡ - B¡pi, where A¡ and B; 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 49P: If a monopolist produces q units, she can charge 400 4q dollars per unit. The variable cost is 60...
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A firm is considering importing some products to sell in a local market. The unit price
and cost for product i are p; and C;, respectively. While the prices may be determined by the firm,
the costs are given and fixed. For product i, the demand volume is Ai – Bipi, where A; and Bị
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.
Transcribed Image Text:A firm is considering importing some products to sell in a local market. The unit price and cost for product i are p; and C;, respectively. While the prices may be determined by the firm, the costs are given and fixed. For product i, the demand volume is Ai – Bipi, where A; and Bị 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.
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