A company produces two commodities. For both commodities three kinds of raw materials are needed.The quantities (in kg) of each kind of raw material needed to produce one unit of each commodity arepresented in Table 1.Commodity ACommodity BMaterial 1107Material 257Material 31210Table 1: Quantities of raw materials required for the production of one unit of each commodityThe price of raw material 1 is $2 per kg, the price of raw material 2 is $3 per kg, and the price of rawmaterial 3 is $4 per kg. A maximum of only 20,000 kgs of raw material 1 can be purchased, a maximum ofonly 15,000 kgs of raw material 2, and a maximum of only 25,000 kgs of raw material 3 can be purchased.1. The company wants to maximize the total number of commodity units it produces. Write thisproblem as an optimization model.2. Implement the model you derived in Part 1 in AMPL and present the optimal solution you obtained.3. Assume now that the company wants to keep the costs for raw material as low as possible, whileproducing at least 1,000 units of each commodity. Write this problem as an optimization model.4. Implement the model you derived in Part 3 in AMPL and present the optimal solution you obtained.

In this question we have been tasked with formulating and implementing linear optimization models…

Answered: A company produces two commodities. For…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter7: Nonlinear Optimization Models

Section7.3: Pricing Models

Problem 5P

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