dolution

Fruit Computer Company is ready to make its annual purchase of computer chips. Fruit can purchase chips (in lots of 100) from three suppliers. Each chip is rated as being of excellent, good, or mediocre quality. During the coming year, Fruit will need 5,000 excellent chips, 3,000 good chips, and 1,000 mediocre chips. The characteristics of the chips purchased from each supplier are shown in Table 57. Each year, Fruit has budgeted $28,000 to spend on chips. If Fruit does not obtain enough chips of a given quality, then the company may special-order additional chips at $10 per excellent chip, $6 per good chip, and $4 per mediocre chip. Fruit assesses a penalty of $1 for each dollar by which the amount paid to suppliers 1–3 exceeds the annual budget. Formulate and solve an LP to help Fruit minimize the penalty associated with meeting the annual chip requirements. Also use preemptive goal programming to determine a purchasing strategy. Let the budget constraint have the highest priority, followed in order by the restrictions on excellent, good, and mediocre chips.