The task is to determine an optimal output plan for a single day, assuming that production can be either sold or else stored at negligible cost. The daily demand figures are subject to alternative interpretations. Investigate the following. (a) The daily demands represent potential sales. In other words, the model should contain demand ceilings (upper limits). What is the optimal profit? (b) The daily demands are strict obligations. In other words, the model should contain demand constraints that are met precisely. What is the optimal profit? (c) The daily demands represent minimum sales commitments, but all output can be sold. In other words, the model should permit the production to exceed the daily commitments. What is the optimal profit?
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