The Heat-Aire Company has two plants that produce identical heat pump units. However, production costs at the two differ due to the technology and labor used at each plant. The total costs of production at the plants depend on the quantity produced, and are described as:

X1 is the number of heat pumps produced at plant 1 and X2 is the number of heat pumps produced at plant 2. Neither plant can make more than 600 heat pumps. Heat pumps can be shipped from either plant to satisfy demand from four different customers. The unit shipping costs and demands for each customer are summarized in the following table.

What is the optimal production and shipping plan if management wants to meet customer demand at the lowest total cost?
a. Formulate an NLP model for this problem.
b. Implement your model in a spreadsheet and solve it.
c. What is the optimalsolution?

Transcribed Image Text:

I cost at plant 1 21X 15 Total cost at plant 2: X5+0.3% + 10 2 Cusmer 3 Customer 4 Customer 1 $23 $33 300 Cusiomer Plant 1 Plant 2 Demand $30 $27 250 $32 $25 150 $26 $24 400