The Building Block Method
production and shipping models into one large model, a common approach to problem solving.
(This example uses the full power of your
spreadsheet software to develop larger applications using smaller ones as building blocks.
In this way, comprehensive models can be created which can simultaneously cover many
different aspects of a business situation.)
You run three plants. Each plant is capable of producing six products from six raw
materials. You also operate two steel mills that can ship steel as a raw material to any
of your plants. You want to know the amount of steel each mill should ship to each plant
and the number of products each plant should produce to maximise your total profit.
The PRODMIX and SHIPPING worksheets
are combined in this problem which involves maximising the profit from several
manufacturing plants while minimising the cost of shipping raw materials from multiple
The objective of optimisation is to maximise
total profits. The total profit is the sum of individual plant profits, minus the sum of
the shipping costs from the individual steel mills.
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