The management of the Albert Hanson Company is trying to determine the best product mix for two new products. Because these products would share the same production facilities, the total number of units produced of the two products combined cannot exceed two per hour. Because of uncertainty about how well these products will sell, the profit from producing each product provides decreasing marginal returns as the production rate is increased. In particular, with a production rate of R1 units per hour, it is estimated that Product 1 would provide a profit per hour of $200R1 – $100 R21. If the production rate of product 2 is R2 units per hour, its estimated profit per hour would be $300R2 – $100R22.
(a) Formulate a quadratic programming model in algebraic form for determining the product mix that maximizes the total profit per hour.
(b) Formulate this model on a spreadsheet.
(c) Use Solver (or ASPE) and its GRG Nonlinear solving method to solve this model.
(d) Use ASPE and its Quadratic solving method to solve this model.