Klein Chemicals, Inc., produces a special oil-based material that is currently in short supply. Four of Klein€™s customers have already placed orders that together exceed the combined capacity of Klein€™s two plants. Klein€™s management faces the problem of deciding how many units it should supply to each customer. Because the four customers are in different industries, different prices can be charged because of the various industry pricing structures. However, slightly different production costs at the two plants and varying transportation costs between the plants and customers make a €œsell to the highest bidder€ strategy unacceptable. After considering price, production costs, and transportation costs, Klein established the following profit per unit for each plant-customer alternative:

The plant capacities and customer orders are as follows:

How many units should each plant produce for each customer to maximize profits? Which customer demands will not be met? Show your network model and linear programmingformulation.

Transcribed Image Text:

Customer Plant Clifton Springs Danville $32 $34 $34 S30 $32 $28 $40 $38 Plant Clifton Springs Danville Capacity (units)Distributor Orders (units 5000 D 2000 D2 5000 D3 3000 D4 2000 3000