Reference- https://www.chegg.

com/homework-help/questions-answers/rico-ag-german-
fertilizer-contract-supply-10-000-tons-3-12-12-ferti8800822
Question:
Rico-AG is a German fertilizer company, which has just received a contract to supply 10,000
tons of 3-12-12 fertilizer. The guaranteed composition of this fertilizer is (by weight) at least
3% nitrogen, 12% phosphorus, and 12% potash. This fertilizer can be mixed from any
combination of the raw materials described in the table below. (Dm stands for Deutschmarks
the currency in Germany.)

Raw Material % Nitrogen %Phosphorus % Potash Current World Price/Ton

AN 50 0 0 190Dm

SP 1 40 5 180 Dm

CP 2 4 35 196 Dm

BG 1 15 17 215 Dm

a. Formulate an LP model for this problem. Write out the linear optimization problem being
solved.
b. What is the optimal solution?
ANS-
Context header: Expenditure
Context explanation: Expenditure is the discharging of money from authority to an economy
for production process. In any economy discharge of money is done by two mode that is
private mode and public mode. Expenditure is very important for an economy because it lead
to growth and employment.
Answer and explanation:
| Raw material |nitrogen |phosphorous |potash | current price in world |
| AN | 50 | 0|0|190|
| SP | 1 |40|5|180|
| CP| 2 |4|35|196|
| BG | 1 |15|17|215|
A.
Calculating through LP model
Minimizing,
Raw material used for making fertilizer. According to table and value given,
Fertilizer combination = 190AN + 180SP + 196CP + 215BG
According, table given that these chemical ingredients in appropriate ratio. Therefore,
= 0.50AN + 0.1SP + .02 + .01BG must be equal to some extent greater than 3% of total
expenditure that (3% of 10000)
= 0.40sp+.04cp+015BG  12%×10000
= 0.5sp+.35cp+0.175BG  12%×10000

Therefore, LP model obtained NA, SP, CP, BG  0

B.
According to above LP model calculation, the optimal solution for fertilizer ingredient is,
359.32 tons AN is use in fertilizers
7247.46 tons SP is use in fertilizers
2393.22 tons CP is use in fertilizers
0.00 tons BG is use in fertilizers
So the total cost or expenditure involve in making fertilizers is 1841.885