This exercise was also contributed by Dr. Rick Wilson of Oklahoma State University. You are the Water Resources Manager for Thirstiville, OK, and are working out the details for next year's contracts with three different entities to supply water to your town. Each water source (A, B, C) provides water of different quality. The quality assessment is aggregated together in two values P1 and P2, representing a composite of contaminants, such as THMs, HAAs, and so on. The sources each have a maximum of water that they can provide (measured in thousands of gallons), a minimum that we must purchase from them, and a per thousand gallon cost.

On the product end, you must procure water such that you can provide three distinct water products for next year (this is all being done at the aggregate "city" level).
You must provide drinking water to the city, and then water to two different wholesale clients (this is commonly done by municipalities). The table below shows requirements for these three products, and the "sales" or revenue that you get from each customer (by thousand gallons, same scale as the earlier cost).
For each of the three water products/customers, MIN is the minimum that we have to provide to each, MAX is the maximum that we can provide (it is reasonable to be provided with a targeted range of product to provide to our customers), the maximum P1 and P2 weighted average for the water blended together for each quality
"category" (the contaminants) per customer, and the sales price.

Yes, the second wholesale customer (W Sale 2) will take as much water as you can blend together for them. Obviously, water from all three sources will need to be blended together to meet the Thirstiville customer requirements. There is one more requirement: for each of the three products (drinking water and the two wholesale clients), Source A and Source B both individually (yes, separately) must make up at least 20% of the total amount of the production of that particular water type. We do not have such a requirement for Source C. Create an appropriate LP model that determines how to meet customer water demand for next year while maximizing profit (sales less costs). Summarize your results (something more than telepathy—say, some sort of table of data beyond the model solution?) It must use words ( ) and indicate how much water we should promise to buy from our three sources. Integers are not required.

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Source A Source B Source C MIN 400 1000 0 MAX P1 1000 4 2500 3.5 775 5 P2 1 3 2.5 COST 0.25 0.175 0.20