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An airplane manufacturing company receives orders from three different customers. Due to the capacity limitation of the company, it cannot fulfill all three orders.
An airplane manufacturing company receives orders from three different customers. Due to the capacity limitation of the company, it cannot fulfill all three orders. Therefore, a decision needs to be made on the number of airplanes the company will agree to produce (if any) for each of the three customers. The following table shows the start-up cost, marginal net revenue, capacity used, and maximum order. This company wants to determine how many airplanes to produce for each customer (if any) to maximize the company's total profit. Also, airplanes for customer 1 can be produced as long as airplanes for customer 2 or 3 are produced. Formulate a model with both integer and binary variables for this problem. [20] 1 Customer 2 Start-up cost $3 million $2 million Marginal net revenue $2 million Capacity used per plane 20% $3 million 40% Maximum order 3 planes 2 planes 3 $0 million $0.8 million 20% 5 planes
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