# Answered Essay: Edwards Manufacturing Company purchases two component parts from three different suppliers. The suppliers have limited capacity, and no

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:

Supplier
Component 1 2 3
1 \$10 \$14 \$13
2 \$12 \$12 \$12

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 Capacity 1 2 3 550 1025 800

If the Edwards production plan for the next period includes 1050 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.

Supplier
1 2 3
Component 1 ? ? ?
Component 2 ? ? ?

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

\$ ?

Q1) Below is the linear programming formulation and calculation –

Objective function

Minimize purchase cost Z = 10S1C1+12S1C2+14S2C1+12S2C2+13S3C1+12S3C2

where Si is supplier and Ci is Component

subject to constraints –

Supplier capacity

S1C1+S1C2 <=550

S2C1+S2C2 <=1025

S3C1+S3C2<=800

Production plan – components

S1C1+S2C1+S3C1 >=1050

S1C2+S2C2+S3C2 >=800

Below is the solver solution –

Q2) The total purchase cost for the components based on the calculation in solver above = 21600 \$

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