Edwards Manufacturing Company purchases two component parts from three different

Question

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: Supplier Component 1 2 3 1 $10 $12 $14 2 $10 $10 $11 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 are as follows: Supplier 1 2 3 Capacity 600 1050 775 If the Edwards production plan for the next period includes 1050 units of component 1 and 800 units of component 2, what purchases do you recommend? That is, how many units of each component should be ordered from each supplier? Round your answers to the nearest whole number. Supplier 1 2 3 Component 1 Component 2 What is the total purchase cost for the components? Round your answer to the nearest dollar. $

Explanation / Answer

Solving the linear model in Excel Solver:

a) No of units of each component to be ordered from each supplier:

b) Total Purchase Cost = $ 20,400

Decision Variables: a,b,c be quanity puchased of Component 1 from the 3 suppliers respectively, and x,y,z be the quantity of the component 2 purchased from the 3 suppliers respectively. Constraints: a,b,c,x,y,x>=0 non negativity a,b,c,x,y,x= int component quanity cannot be in fractions a+b+c = 1000 Demand Constraints x+y+z = 800 a+x <= 600 Supply Constraints b+y <= 1000 c+z <= 800 Objective Function: Minimize total Price Min (12 a+ 13 b + 14 c+ 10 x+ 11 y + 10 z)

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