Develop a network representation of this problem. Develop a linear programming model that can be used for solving this problem.
- 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, Klein established the following profit per unit for each plant-customer alternative:
Customer
Plant D1 D2 D3 D4
Clifton Springs $32 $34 $32 $40
Danville $34 $30 $28 $38
The plant capacities and customer orders are as follows:
Plant Capacities (units) Distributor Orders (units)
Clifton Springs 5000 D1 2000
D2 5000
Danville 3000 D3 3000
D4 2000
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- Develop a network representation of this problem.
- Develop a linear programming model that can be used for solving this problem.
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