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The Philbrick Company has two plants on opposite sides of the United States. Each of these plants produces the same two prod - ucts and

The Philbrick Company has two plants on opposite sides of
the United States. Each of these plants produces the same two prod-
ucts and then sells them to wholesalers within its half of the coun-
try. The orders from wholesalers have already been received for the
next 2 months (February and March), where the number of units
requested are shown below. (The company is not obligated to com-
pletely fill these orders but will do so if it can without decreasing its
profits.)
Plant 1 Plant 2
Product February March February March
13,6006,3004,9004,200
24,5005,4005,1006,000
Each plant has 20 production days available in February and 23
production days available in March to produce and ship these prod-
ucts. Inventories are depleted at the end of January, but each plant
has enough inventory capacity to hold 1,000 units total of the two
products if an excess amount is produced in February for sale in
March. In either plant, the cost of holding inventory in this way is
$3 per unit of product 1 and $4 per unit of product 2.
Each plant has the same two production processes, each of
which can be used to produce either of the two products. The pro-
duction cost per unit produced of each product is shown below for
each process in each plant. Plant 1 Plant 2
Product Process 1 Process 2 Process 1 Process 2
1 $62 $59 $61 $65
2 $78 $85 $89 $86
The production rate for each product (number of units produced per
day devoted to that product) also is given for each process in each
plant below.
Plant 1 Plant 2
Product Process 1 Process 2 Process 1 Process 2
1100140130110
2120150160130
The net sales revenue (selling price minus normal shipping
costs) the company receives when a plant sells the products to its
own customers (the wholesalers in its half of the country) is $83 per
unit of product 1 and $112 per unit of product 2. However, it also is
possible (and occasionally desirable) for a plant to make a shipment
to the other half of the country to help fill the sales of the other plant.
When this happens, an extra shipping cost of $9 per unit of product 1
and $7 per unit of product 2 is incurred.
Management now needs to determine how much of each prod-
uct should be produced by each production process in each plant
during each month, as well as how much each plant should sell of
each product in each month and how much each plant should ship
of each product in each month to the other plants customers. The
objective is to determine which feasible plan would maximize the
total profit (total net sales revenue minus the sum of the production
costs, inventory costs, and extra shipping costs).
(a) Formulate a complete linear programming model in algebraic
form that shows the individual constraints and decision varia-
bles for this problem.
C (b) Formulate this same model on an Excel spreadsheet instead.

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