Non-Parametric Model A. Recycling of plastics using Linear Programming In Los Baños, Laguna, the use of plastic bags and any plastic materials were prohibited to eliminate the dangerous effects of plastics to the humans and the environment. In cooperation with the local government, the Makiling Likhang Sining (MLS), who produces environment-friendly bags, will begin production of two new developed bags during the next three (3) months. MLS will need operating funds to cover material cost, labor, and selling expenses during this initial production period. Income from this initial production operation will not be available until after the end of the period; thus MLS must arrange financing for these operating expenses before production can begin. MLS has P3,000 in external funds available to cover expenses of this operation. The needed additional funds will be generated externally from a local bank that has offered a line of short-term credit in an amount not exceed P10,000. The interest rate over the life of the loan will be 12% per year on the average amount borrowed. One stipulation set by the bank requires that the total of the MLS cash allocated to this operation plus the accounts receivable for this product line must be at least twice as great as the outstanding loan plus interest at the end of the initial production period. In addition, the man-hour capacity of MLS is only 2,500 hours of assembly time and 150 hours of packaging and shipping time available for the new product line during the initial three-month production period. The other cost, price and production time requirements for the two models of bag are shown below. Model Selling Profit price (P) margin (P) Assembly dept. (man-hours) Packaging & shipping (man-hours) Materials & other variable expenses (unit cost P) 50 100 Bag1 Bag2 58 120 8 20 12 25 1 2 Additional restrictions that were imposed by MLS management in order to guarantee that the market reaction to both models of bag can be tested is that; at least 50 units of model 1 (bag 1) and at least 25 units of model 2 (bag 2) must be produced in this initial production period. 2 Since the cost of units producede con los remodelands will inreffect experience an are produce one unit of model 1932will be repaid approximately three months later, that is, average rate of turnover of accounts receivable at three months. The funds borrowed to funds will be reduced. Hence, there will be 4 decision variables for this problem. Assume that (P50 x 12X) and (P100 x 12X14). Requirements: 1 Give the decision variables. 2. Formulate the complete linear programming model. 3. Give the optimal financial mix for the production of the two products (number of units per product, the expected profit per product, and the total expected profit).