Exeter Mines produces iron ore at four different mines; however, the ores extracted at each mine are different in their iron content. Mine 1 producesmagnetite ore, which has a 70% iron content; mine 2 produces limonite ore, which has a 60% iron content; mine 3 produces pyrite ore, which has a50% iron content; and mine 4 produces taconite ore, which has only a 30% iron content. Exeter has three customers that produce steelArmco,Best, and Corcom. Armco needs 400 tons of pure (100%) iron, Best requires 250 tons of pure iron, and Corcom requires 290 tons. It costs $37 toextract and process 1 ton of magnetite ore at mine 1, $46 to produce 1 ton of limonite ore at mine 2, $50 per ton of pyrite ore at mine 3, and $42per ton of taconite ore at mine 4. Exeter can extract 350 tons of ore at mine 1; 530 tons at mine 2; 610 tons at mine 3; and 490 tons at mine 4. Thecompany wants to know how much ore to produce at each mine in order to minimize cost and meet its customers' demand for pure (100%) iron. If Exeter Mines could increase production capacity at any one of its mines, which should it be? Why?
Exeter Mines produces iron ore at four different mines; however, the ores extracted at each mine are different in their iron content. Mine 1 produces
magnetite ore, which has a 70% iron content; mine 2 produces limonite ore, which has a 60% iron content; mine 3 produces pyrite ore, which has a
50% iron content; and mine 4 produces taconite ore, which has only a 30% iron content. Exeter has three customers that produce steelArmco,
Best, and Corcom. Armco needs 400 tons of pure (100%) iron, Best requires 250 tons of pure iron, and Corcom requires 290 tons. It costs $37 to
extract and process 1 ton of magnetite ore at mine 1, $46 to produce 1 ton of limonite ore at mine 2, $50 per ton of pyrite ore at mine 3, and $42
per ton of taconite ore at mine 4. Exeter can extract 350 tons of ore at mine 1; 530 tons at mine 2; 610 tons at mine 3; and 490 tons at mine 4. The
company wants to know how much ore to produce at each mine in order to minimize cost and meet its customers' demand for pure (100%) iron. If Exeter Mines could increase production capacity at any one of its mines, which should it be? Why?
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