Question: A manufacturing process uses four interchangeable raw materials. The raw materials differ in properties, which leads to different output units per unit of raw material.
A manufacturing process uses four interchangeable raw materials. The raw materials differ in properties, which leads to different output units per unit of raw material. They also differ in cost and lot sizes. The following table summarizes the data of the situation:
A raw material, if used, must be in the indicated lots only (e.g., Material 1 can be bought either as a lot of size 100 units or none at all). The number of output units must be at least 950. Formulate a model to determine the raw materials that should be used at minimum cost.
Lot size (units) Product units per unit of raw material Cost per unit of raw material ($) Material 1 Material 2 100 160 3 30 2 80 Material 3 80 5 200 Material 4 310 1 10 Material 5 50 4 120
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