A chemical company manufactures three chemicals: A, B, and C. These chemicals are produced via two production processes: 1 and 2. Running process 1 for an hour costs $400 and yields 300 units of A, 100 units of B, and 100 units of C. Running process 2 for an hour costs $100 and yields 100 units of A and 100 units of B. To meet customer demands, at least 1000 units of A, 500 units of B, and 300 units of C must be produced daily.
Use Excel Solver to determine a daily production plan that minimizes the cost of meeting the company’s daily demand.
Define the decision variables necessary for the LP formulation as follows:
X = # hours of for process 1 to run Y =
# hours of for process 2 to run
1. Formulate appropriately as an LP to minimize the cost. Provide the algebraic formulation in your submission. Must be neatly presented. (Note: Integer constraints are NOT needed in this problem.)
2. Input and solve the formulation using Excel. After running Solver, generate both answer report and sensitivity report. Explain the production plan based on the solutions.