Edwards Manufacturing Company purchases two component parts from three different

Question

Edwards Manufacturing Company purchases two component parts from three different suppliers. The suppliers have limited capacity, and no one supplier can meet all the company’s needs. In addition, the suppliers charge different prices for the components. Component price data (in price per unit) are as follows:

Each supplier has a limited capacity in terms of the total number of components it can supply. However, as long as Edwards provides sufficient advance orders, each supplier can devote its capacity to component 1, component 2, or any combination of the two components, if the total number of units ordered is within its capacity. Supplier capacities are as follows:

If the Edwards production plan for the next period includes 1000 units of component 1 and 800 units of component 2, what purchases do you recommend? That is, how many units of each component should be ordered from each supplier? Round your answers to the nearest whole number.

What is the total purchase cost for the components? Round your answer to the nearest dollar.

$ ????

Supplier Component 1 2 3 1 $11 $10 $13 2 $10 $11 $11

Explanation / Answer

For component 1:

supplier 2 have minimum cost and capacity 1050.

So all the component 1 (1000) can be purchased from supplier 2.

So, supplier 2 have 50 more capacity.

Now, supplier 1 have minimum cost for component 2 and have capacity of 650.

so, number of component 2 from supplier1 can be 650.

Now, we need 150 more component 2.

supplier 2 and 3 have same cost for component 2.

supllier have only 50 capacity now and supplier have 850.

So, 150 component 2 can be purchased from supplier 3.

Let y be the number of components from

Supplier 1 2 3 Total cost Component 1 0 1000 0 1000 10000 Component 2 650 0 150 800 8150 Total cost 18150

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.