OPIM 101 Management Science, Semester 3B, 2010/2011 Assignment 1: Introduction to Linear Programming Modeling, Graphical solution, Sensitivity

Analysis, Solving by Excel Due: 12pm, Thursday 23rd June 2011 The maximum marks for this assignment is 100. You do NOT need to solve the problem if the question did not state solve. In the submission of the excel le, label your le as Assignment 1 Your name. The le can be named after any group members name. (Warm-up Question, NOT graded) A)The Pyrotec Company produces three electrical products- clocks, radios and toasters. These products have the following resource requirements:
Cost/Unit ($) Clock Radio Toaster 7 10 5 Labor Hours/Unit 2 3 2

The manufacturer has a daily production budget of $2,000 and a maximum of 660 hours of labor. Maximum daily customer demand is for 200 clocks, 300 radios, and 150 toasters. Clocks sell for $15, radios for $20, and toasters for $12.

i) The company wants to know the optimal product mix that will maximize revenue. Formulate a linear programming model for this problem. ii) Suppose the company wants to know the optimal product mix that will maximize prot. Formulate a linear programming model for this problem.

B) Anna Broderick is the dietitian for the State University football team, and she is attempting to determine a nutritious lunch menu for the team. She has set the following nutritional guidelines for each lunch serving: a) between 1500 and 2000 calories b) at least 6mg of iron c) at least 10g but no more than 50g of fat d) at least 30g of protein 1

e) at least 40g of carbohydrates f) no more than 30mg of cholesterol She selects the menu from seven basic food items, as follows, with the nutritional contribution per pound and the cost as given:
Food Item Calories (per lb.) Chicken Fish Ground Beef Dried Beans Lettuce Potatoes Milk (Brand 1) Milk (Brand 2) 520 500 860 600 50 460 240 180 Iron (mg/lb.) 4.4 3.3 0.3 3.4 0.5 2.2 0.2 0.6 Protein (g/lb.) 17 85 82 10 6 10 16 19 Carbohydrates (g/lb.) 0 0 0 30 0 70 22 10 Fats (g/lb.) 30 5 75 3 0 0 10 10 Cholesterol (mg/lb.) 180 90 350 0 0 0 20 18 Cost $/lb. 0.80 3.70 2.30 0.90 0.75 0.40 0.83 1.00

Due to some restriction from the supplier, the amount of milk (brand 2) used has to be more than the amount of milk (brand 1) used. The dietitian wants to select a menu to meet the nutritional guidelines while minimizing the total cost per serving. Formulate a linear programming model for this problem.

GRADED QUESTIONS 1. (total: 5 marks) The advertising director for Diversey Paint and Supply, a chain of four retail stores on Chicagos North Side, is considering two media possibilities. One plan is for a series of half-page ads in Sunday Chicago Tribune newspaper, and the other is for advertising time on Chicago TV. The stores are expanding their lines or do-it-yourself tools, and the advertising director is interested in an exposure level of at least 40 % within the citys neighbourhood and 60% in northwest suburban areas. The TV viewing time under consideration has an exposure rating per spot of 5% in city homes and 3% in the northwest suburbs. The Sunday newspaper has corresponding exposure rates of 4% and 3% per ad. The cost of a half-page Tribune advertisement is $925; a television spot costs $2,000. It is required that the total amount spent on Tribune advertisement as to be at least the amount spent on television spot. 2

Diversery Paint would like to select the least costly advertising strategy that would meet desired exposure levels. Formulate a linear programming. (5 marks) 2. (total: 5 marks) A dietitian prepares breakfast menus every morning for hospital patients. Part of the dietitians responsibility is to make sure that the minimum daily requirements for vitamin A and vitamin B are met. The minimum daily requirements for vitamin A and vitamin B are 16mg and 12mg respectively. At the same time, the cost of the menus must be kept as low as possible. The main breakfast staples providing vitamins A and B are eggs, bacon and cereal. Each Egg gives 2mg of vitamin A and 3mg of vitamin B. Each bacon strip gives 4mg of vitamin A and 2mg of vitamin B. Each cup of cereal gives 1mg of vitamin A and 1mg of vitamin B. Cost of a egg, a bacon strip and a cup of cereal are 4 cents, 3 cents and 2 cents respectively. Formulate an appropriate model to help the dietitian make his optimal menu. (5 marks) 3. (total: 17 marks, Submit Excel File) A department store has a schedule for the next season, which requires the number of employees in each day of the week be at least 22, 17, 13, 14, 15, 18, and 24 (from Sunday to Saturday). The employees are grouped into 7 shifts each with 5 consecutive working days. Shift 1 takes Sunday and Monday o, shift 2 Monday and Tuesday o, and so on. The wage per employee per day (including the o days) is $40. Employees working on Fridays earn an extra $5 for those days. Employees working on Saturdays and Sundays earn an extra $10 for those days. Management wants to meet the schedule requirement at the minimal wage cost.

a) Formulate this as a linear programming problem. (8 marks) b) Solve the model using Excel. (5 marks) c) The management wants to remove the scheme for Shift 1 (Employees can no longer take Sunday and Monday o). What changes have to be done on your model to accommodate this change? What is the impact on the wage cost? (4 marks) 4. (total: 8 marks) The South Company makes a feed mix from four ingredients - oats, corn, soybeans and vitamin supplement. The company has 300 pounds of oats, 400 pounds of corn, 200 pounds of soybeans

and 100 pounds of vitamin supplement available for the mix. The company has the following requirements for the mix: At least 30% of the mix must be soybeans. at least 20% of the mix must be vitamin supplement. The ratio of corn to oats cannot exceed 2 to 1. The amount of oats cannot exceed the amount of soybeans. The mix must be at least 500 pounds. A pound of oats costs $0.50; a pound of corn cost $1.20; a pound of soybeans cost $0.60; and a pound of vitamin supplement cost $2.00. The company wants to know the number of pounds of each ingredient to put in the mix in order to minimize cost. Formulate a linear programming model for this problem. (8 marks) 5. (total: 15 marks, Submit Excel File) The Donnor meat processing rm produces wieners from four ingredients: chicken beef, pork and a cereal additive. The rm produces three types of wieners: regular, beef and all-meat. The company outsources the ingredients on a daily basis. However, the amount outsourced cannot exceed the available supply that the supplier has. It is not necessary that the rm uses all the ingredients available. See Table 1. Each type of wiener has certain ingredients specications, as shown in Table 2.
lb/Day Chicken Beef Pork Cereal additive 200 300 150 400 Cost/lb ($) 0.20 0.30 0.50 0.05

Table 1: Available supply and cost for each ingredient.

i) Without solving the model, name a possible mix of ingredients to form 100lb of Max-Beef wiener. (2 marks) ii) The rm wants to know the amount of wieners of each type to produce in order to maximize prot. Formulate a linear programming model for this problem. Present the model clearly in terms of its objective and constraints. (8 marks) 4

Specications Regular Not more than 15 % beef and pork combined Not less than 20 % chicken Max-Beef All-meat Not less than 70 % beef No cereal additive Not more than 50% beef and pork combined

Selling Price/lb ($) 0.90

1.25 1.75

Table 2: Requirement for wiener.

iii) Solve the problem using Excel. (Submit the excel spreadsheet) ( 5 marks)

6. (total: 15 marks, Submit Excel File) Linear Programming - Thousand-Won Books

(Not found in 9th Edition) 10th Edition, Chapter 4, Question 40

7. Graphical Method (total: 20 marks) A company produces two products, A and B, which have prot $9 and $7 respectively. Each unit of product must be processed on two assembly lines, where the required production times are as follows:
Hours/Unit Product A B Total Hours available Line 1 12 4 60 Hours/Unit Line 2 4 8 40

a) Formulate a linear programming model to determine the optimal mixture to produce in order to maximize prot. (2 marks) b) Transform this model into standard form. (3 marks) c) Solve model graphically. (5 marks) i) Identify the amount of unused resources (i.e., slack) at each of the graphical extreme points. (4 marks)

ii) What would be the eect on the optimal solution if the production time on line 1 was reduced to 40 hours? Explain briey. (3marks) iii) What is the upper bound for the prot of product B such that the current optimal solution remains optimal? (3 marks) 8. Mountain Laurel Vineyards (total: 15 marks, Submit Excel File) Mountain Laurel Vineyards produces three kinds of wine- Mountain Blanc, Mountain Red, and Mountain Blush. The company has 17 tons of grapes available to produce wine this season. A cask of Blanc requires 0.21 ton of grapes, a cask of Red requires 0.24 ton, and a cask of Blush requires 0.18 ton. The vineyard has enough storage space in its aging room to store 80 casks of wine. The vineyard has 2,500 hours of production capacity, and it requires 12 hours to produce a cask of Blanc, 14.5 hours to produce a cask of Red, and 16 hours to produce a cask of Blush. From past sales, the vineyard knows that demand for the Blush will be no more than half of the sales of the other two wines combined. The prot for a cask of Blanc is $7,500, the prot for a cask of Red is $8,200, and the prot for a cask of Blush is $10,500. a) Formulate a linear programming model for this problem. Present your formulation and solve the model with excel. (Submit the excel sensitivity report and model ) (6 marks) b) For the rest of the question, answer them using the excel sensitivity report. Explain briey. Do not resolve the problem. If the excel report is not sucient to answer the question, state the reason.

i) If the vineyard determined that the prot from Red was $9,000 instead of $8,200, how would that aect the optimal solution? Explain briey. (3 marks) ii) If the vineyard could obtain 0.5 ton more of grapes, 500 more hours of production capacity, or enough storage capacity to store 4 more casks of wine, which should it choose? Explain briey. (3 marks) iii) Mountain Laurel Vineyards is considering expanding its production capacity. It will cost $10 to increase an hour of production capacity. Will you advise Mountain Laurel Vineyards to go ahead with its expansion plan? Explain briey. (3 marks) -END-

Challenging Problems (NOT Graded) 1) Ampco is a manufacturing company that has a contract to supply a customer with parts from April through September. However, Ampco does not have enough storage space to store the parts during this period, so it needs to lease warehouse space during the 6-month period. Following are Ampcos space requirements:
Month April May June July August September Required Space (ft2 ) 47,000 35,000 52,000 27,000 19,000 15,000

The rental agent Ampco is dealing with has provided it with the following cost schedule for warehouse space. This schedule shows that the longer the space is rented, the cheaper it is. For example, if Ampco rents space for all 6 months, it cost $1.00 per square foot per month, whereas if it rents the same space for only 1 month, it costs $1.70 per square foot per month.
Rental Period (months) 6 5 4 3 2 1 $/ft2 per month 1.00 1.05 1.10 1.20 1.40 1.70

Ampco can rent any amount of warehouse space on a monthly basis at any time for any number of (whole) months. Ampco wants to determine the least costly rental agreement that will exactly meet its space needed each month and avoid having any unused space. a) Formulate a linear programming model for this problem. b) Solve the model by excel.

2i) Great Northwoods Outtters is a retail phone-catalog company that specializes in outdoor clothing and equipment. A phone station at the company will be staed with either full-time operators or temporary operators 8 hours per day. Full-time operators, because of their experience and training, process

more orders and make fewer mistakes than temporary operators. However, temporary operators are cheaper because they receive a lower wage rate and are not paid benets. A full-time operator can process about 360 orders per week, whereas a temporary operator can process about 270 orders per week. A full-time operator averages 1.1 defective orders per week, and a part-time operator incurs about 2.7 defective orders per week. The company wants to limit defective orders to 200 per week. The cost of stang a station with full-time operators is $ 610 per week, and the cost of a station with part-time operators is $450 per week. Using historical data and forecasting techniques, the company has developed estimates of phone orders for an 8-week period, as follows:
Week 1 2 3 4 5 6 7 8 Orders 19,500 21,000 25,600 27,200 33,400 29,800 27,000 31,000

The company does not want to hire or dismiss full-time employees after the rst week (i.e., the company wants a constant group of full-time operators over the 8-week period). Following exactly the forecasted orders, the company wants to determine how many full-time operators it needs and how many temporary operators to hire each week to meet weekly demand while minimizing labor costs. a) Formulate a linear programming model for this problem. b) Solve this model by using excel. c) Solve the model again with the assumption that the number of operators must be integers. Comment on your solution. i.e. How is it dierent from the relaxed model (without integer constraint) and why?

2ii)Great Northwoods Outtters is going to alter its stang policy. Instead of hiring a constant group of full-time operators for the entire 8-week planning period, it has decided to hire and add full-time operators as the 8-week period progresses, although once it hires full-time operators, it will not dismiss them. Reformulate the linear programming model and solve to determine the cost savings (if any). END Solution to Warm-up question. 8

A) Decision variables: Let x1 denote the number of clocks to produce. Let x2 denote the number of radios to produce. Let x3 denote the number of toasters to produce. max s.t. 7x1 + 10x2 + 5x3 2000 2x1 + 3x2 + 2x3 660 x1 200 x2 300 x3 150 x 1 , x2 , x3 0 ii) Constraints remain the same. The objective function changes to max 8x1 + 10x2 + 7x3 B) Let xi be the number of lbs of ingredient i used per serving, where i = 1, 2, 3, 4, 5, 6, 7, 8 represent chicken, sh, ground beef, dried beans, lettuce, potatoes, milk (brand 1) and milk (brand 2) respectively. min 0.8x1 + 3.7x2 + 2.30x3 + 0.90x4 + 0.75x5 + 0.40x6 + 0.83x7 + x8 s.t. 520x1 + 500x2 + 860x3 + 600x4 + 50x5 + 460x6 + 240x7 + 180x8 2000 520x1 + 500x2 + 860x3 + 600x4 + 50x5 + 460x6 + 240x7 + 180x8 1500 4.4x1 + 3.3x2 + 0.3x3 + 3.4x4 + 0.5x5 + 2.2x6 + 0.2x7 + 0.6x8 6 17x1 + 85x2 + 82x3 + 10x4 + 6x5 + 10x6 + 16x7 + 19x8 30 30x4 30x1 + 5x2 + 75x3 + 3x4 30x1 + 5x2 + 75x3 + 3x4 180x1 + 90x2 + 350x3 x8 x7 x1 , x 2 , x 3 , x 4 , x 5 , x 6 , x 7 0 + 70x6 + 22x7 + 10x8 40 + 10x7 + 10x8 50 + 10x7 + 10x8 10 + 20x7 + 18x8 30 (Calories) (Calories) (Iron) (Protein) (Carbohydrates) (Fats) (Fats) (Cholesterol) (suppliers restriction) (2) (1) 15x1 + 20x2 + 12x3