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( Product mix problem with fixed / setup cost and capacity constraints ) Three raw materials are used to produce 3 products: a fuel additive,

(Product mix problem with fixed/setup cost and capacity constraints)

Three raw materials are used to produce 3 products: a fuel additive, a solvent base, and a carpet cleaning fluid. The profit contributions are $40 per ton for the fuel additive, $30 per ton for the solvent base, and $50 per ton for the carpet cleaning fluid. Each ton of fuel additive is a blend of 0.4 tons of material 1 and 0.6 tons of material 3.Each ton of solvent base requires 0.5 tons of material 1, 0.2 tons of material 2, and 0.3 tons

of material 3. Each ton of carpet cleaning fluid is a blend of 0.6 tons of material 1, 0.1 tons of material 2, and 0.3 tons of material 3. RMC has 20 tons of material 1, 5 tons of material 2, and 21 tons of material 3.

There is a fixed cost for production setup of the products, as well as a maximum production quantity for each of the three products.

Product Setup Cost Maximum Production

Fuel additive $200                          50 tons

Solvent base $50                           25 tons

Cleaning fluid $400                          40 tons

RMC is interested in determining the optimal production quantities for the upcoming planning period to maximize its profit.


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