Edwards Manufacturing Company purchases two component parts from three different
ID: 357955 • Letter: E
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: Supplier 1 2 3 Capacity 575 1000 775
If the Edwards production plan for the next period includes 1050 units of component 1 and 775 units of component 2, what purchases do you recommend? That is, how many units of each component should be ordered from each supplier?
Supplier Component 1 2 3 1 $11 $11 $13 2 $10 $12 $10Explanation / Answer
Answer
Components
Supplier 1
Supplier 2
Supplier 3
Component 1
50
1000
00
Component 2
525
00
250
Components
Supplier 1
Supplier 2
Supplier 3
Component 1
50
1000
00
Component 2
525
00
250
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