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Sep 27 2015 03:27pm
Allocating Plant Output A firm owns five manufacturing plants that are responsible for the quarterly production of an industrial solvent. The production process exhibits diseconomies of scale. At plant p, the cost of making x thousand pounds of the solvent is approximated by the quadratic function f(x) = (1/cp)x2. The parameters cp are plant dependent, as shown in the table.
p 1 2 3 4 5
cp 3 6 4 8 5

The quarterly volume requirement is 50,000 pounds.
How should production be allocated among the five plants in order to minimize the total cost of meeting the volume requirement?

Cant figure out how to set this up in the solver addon on excel. Anybody understand whats going on?
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