Problem:
Total purchase price
1) Develop an LP model for the problem.
2) Solve the LP model using Solver in excel
Questions
Acme Mexico City purchases two products (Product 1 and Product 2) that it stocks from three different vendors (Vendor A, Vendor B and Vendor C). The suppliers have limited capacity, and no one supplier can meet all of demand of Acme Mexico City. In addition, the vendors charge different prices for the products as shown in the table below:
Vendor's Price
Product A B C
1 $12 $13 $14
2 $10 $11 $10
Each vendor has a limited capacity in terms of the total number of products it can supply. However, as long as Acme Mexico City provides sufficiently advanced orders, each supplier can devote its capacity to product 1, product 2, or any combination of the two products, if the total number of units ordered is within its capacity. Vendor capacities are as follows.
Vendor A B C
Capacity 600 1000 800[1]
The demand at the Acme Mexico City store is 1000 units of product 1[2] and 800 units of product 2[3] .
The purchasing manager wants to determine an optimal buying plan [4] that would help determine how many of each product should be from each vendor. To help the purchasing manager: