Digital Controls, Inc. (DCI), manufactures two models (A and B) of a radar gun used by the police to monitor the speed of automobiles. An order for each model has been received and must be satisfied. Each model can be either purchased or manufactured. Units manufactured by DCI require injection molding and assembly time, and there is limited amount of time available in those departments.

The objective is to minimize total cost of acquiring the units (total manufacturing cost + total purchase cost). Variable definitions are:

AM = number of model A units manufactured

BM = number of model B units manufactured

AP = number of model A purchased

BP = number of model B purchased

The formulation appears below.