United Aluminum Company of Cincinnati produces three grades (high, medium, and low) of aluminum at two mills. Each mill has a differentproduction capacity (in tons per day) for each grade, as follows:MillAluminumGrade 1 2High 6 2Medium 2 2Low 4 10The company has contracted with a manufacturing firm to supply at least 12 tons of high-grade aluminum, 8 tons of medium-grade aluminum, and 5tons of low-grade aluminum. It costs United $6,000 per day to operate mill 1 and $7,000 per day to operate mill 2. The company wants to know thenumber of days to operate each mill in order to meet the contract at the minimum cost Identify and explain the shadow prices for each of the aluminum grade contract requirements.
United Aluminum Company of Cincinnati produces three grades (high, medium, and low) of aluminum at two mills. Each mill has a different
production capacity (in tons per day) for each grade, as follows:
Mill
Aluminum
Grade 1 2
High 6 2
Medium 2 2
Low 4 10
The company has contracted with a manufacturing firm to supply at least 12 tons of high-grade aluminum, 8 tons of medium-grade aluminum, and 5
tons of low-grade aluminum. It costs United $6,000 per day to operate mill 1 and $7,000 per day to operate mill 2. The company wants to know the
number of days to operate each mill in order to meet the contract at the minimum cost Identify and explain the shadow prices for each of the aluminum grade contract requirements.
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