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A nationalized company can either manufacture capital goods or consumer goods. The company's production is being planned over a three-period horizon. At the beginning
A nationalized company can either manufacture capital goods or consumer goods. The company's production is being planned over a three-period horizon. At the beginning of period 1, the company has 100 units of capital goods and 50 units of consumer goods in stock. Each unit of capital good can be used to produce either 3 new units of capital goods at the expense of 3 units of consumer goods to be provided from stock or 10 units of consumer goods, over an uninterrupted two-period interval, at the end of which the unit of capital goods again becomes available for use. Once capital goods are produced they can be used for production in subsequent periods. If necessary, capital goods can also be left idle. The company will sell everything in its stock at the beginning of period 4 and close down. The company can also sell either capital or consumer goods in any period according to the following price schedule: Period 1 2 3 Formulate as an LP model. 4 Capital Good $ 4.00 $ 6.00 $ 8.00 $ 3.00 $ / unit Consumer Good 0.10 0.15 0.15 0.10 $ $ $ $
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