Question

Problem 4-11 (Algorithmic)

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	$11	$12	$15
2	$11	$14	$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	550	925	800

If the Edwards production plan for the next period includes 975 units of component 1 and 775 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. If your answer is zero, enter "0".

	Supplier
	1	2	3
Component 1
Component 2

What is the total purchase cost for the components? Round your answer to the nearest dollar.

$  

Answer 1

The given problem can be treated as an unbalanced assignment problem. Attached is the solution.