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4. M&Ms Investments Capital Budgeting
a. x4+x5=1
b. x1+x3+x5=2
c. x2 = x3
The plants recommended for renovation are Big Sur, Carmel, and Fresno.
7. ChargerX Corp.
a. xi = number of battery packs of type i to produce, i=1-3, 1=1kwh,
2=1.5kwh, 3=2kwh
yi = 1 if production is set up to produce battery packs of type I; 0 otherwise
Maximize Profits: 25x1+ 28x2+ 30x3 – 500y1 – 690y2 – 750y3
Subject to:
(2.25x1) + (4.50x2) + (3.00x3) <= 675
(3.00x1) +(1.50x2) + (3.75x3) <= 525
(0.375x1) + (0.375x2) + (0.375x3) <= 75
x1 <= 175yi
x2 <= 150y2
x3 <= 140y3
All xi ≥ 0
All yi are binary
Note: The RHS numbers for the setup constraints could be anything so big
that it doesn’t restrict production if a line is set up. For example, if a production line
is set up for the 1 kwh pack, the most that one could produce given the resources
available is 175 units: even devoting all 525 hours available for chemical treatment,
ChargerX could make no more that 175 packs (525/3.00 = 175). Any larger number
would also work in this constraint.
b. Computer Solution:
Production lines should be set up for the 1 kwh and 1.5 kwh pack, but not the
2 kwh pack.
8. Lemon Inc.
xB=the number of basic smart watches to produce next week
xD=the number of deluxe smart watches to produce next week
sB=1 if the production line is set up to produce the basic smart watch; 0 if
otherwise
sD=1 if the production line is set up to product the deluxe smart watch; 0 if
otherwise
Minimize Cost=25xB+40xD+6000sB+8500sD
Subject to:
xB=10,000sB
xD=6,000sD
sB+sD=1
xB,xD≥0 and integer
sB,sD≥0 and binary
Next week, Lemon Inc. should produce 6,000 deluxe smart watches.
9. Tom’s Power Tools
a. xi=1 if plant i=1-5 is chosen to start building drills and circular saws,
0 otherwise
Minimize Cost Z=25x1+35x2+35x3+40x4+20x5
Subject to:
500x1+800x2+400x3+900x4+200x5≥900
300x1+400x2+800x3+600x4+300x5≥900
All xi ≥0 and binary
b. Computer Solution:
They should start to build drills and saws in the Indianapolis and Omaha plants.
10. West Coast Flowers
a. xi = 1 if training facility opened at location i; 0 otherwise, for i=1-10
(1=Chula Vista, 2=Oceanside, etc.)
Minimize Training Facilities: x1 + x2 + x3 + x4 + x5 + x6 + x7 + x8 + x9 + x10
Subject to:
Chula Vista: x1 + x2 + x3 >= 1
Oceanside: x1 + x2 + x3 + x4 >= 1
Santa Monica: x1 + x2 + x3 + x4 + x5 >= 1
Oxnard: x2 + x3 + x4 + x5 >= 1
Santa Maria: x3 + x4 + x5 + x6 >= 1
King City: x5 + x6 + x7 >= 1
Santa Cruz: x6 + x7 + x8 + x9 >= 1
Daly City: x7 + x8 + x9 + x10 >= 1
Healdsburg: x7 + x8 + x9 + x10 >= 1 (Duplicate; OK to omit)
Willits: x8 + x9 + x10 >= 1
All xi are binary
b. Computer Solution:
c. According to the solution, Santa Cruz, Daly City, and Healdsburg, are
within a half-day drive of more than one training facility.
11. Ramiro Systems
a. xij = 1 if a Technical Expert is assigned to regions i and j, 0 otherwise, for ij=
• PR (Pacific and Rocky Mountain)
• RM (Rocky Mountain and Midwest)
• RSW (Rocky Mountain and Southwest)
• MN (Midwest and Northeast)
• MSE (Midwest and Southeast)
• MSW (Midwest and Southwest)
• NSE (Northeast and Southeast), and
• SWSE (Southwest and Southeast)
MAX Z = 46xPR + 44xRM + 35x1RSW + 67xMN + 53xMSE + 51xMSW + 60xNSE + 44xSWSE
Subject to:
xPR + xRM + xRSW + xMN + xMSE + xMSW + xNSE + xSWSE <= 2
xPR <= 1
xPR + xRM + xRSW <= 1
xRM + xMN + xMSE + xMSW <= 1
xMN + xNSE <= 1
xRSW + xMSW + xSWSE <= 1
xMSE + xNSE + XSWSE<= 1
All xij are binary
b.
The solution recommends assigning one TE to the Pacific/Rocky Mountain
region and the other to the Midwest/Northeast region.
c. This adds a new decision variable (xPSW) and changes the objective function
and the first, second, and sixth constraints:
MAX Z = 46xPR + 53xPSW + 44xRM + 35x1RSW + 67xMN + 53xMSE + 51xMSW +
60xNSE + 44xSWSE
Subject to:
xPR + xPSW + xRM + xRSW + xMN + xMSE + xMSW + xNSE + xSWSE <= 2
xPR + xPSW <= 1
xPR + xRM + xRSW <= 1
xRM + xMN + xMSE + xMSW <= 1
xMN + xNSE <= 1
xRSW + xMSW + xSWSE + xPSW <= 1
xMSE + xNSE + xSWSE<= 1
All xij are binary
In the solution to this modified version of the problem, a TE is to be assigned to the
Pacific/Southwest region instead of the Pacific/Rocky Mountain.
12. Amanda Brown
a. Xi = 1 if she takes course i, 0 otherwise, for i = 1-10
Yi = 1 if she takes any classes at University i, 0 otherwise, for i = A, B
MIN Z = 50X1 + 35X2 +15X3 +20X4 +60X5 +70X6 +25X7 +45X8 +65X9
+15X10 + 200YA + 100 YB
S.T.
X1 + X4 + X5 + X9 ≥ 1
X3 + X4 + X7 + X10 = 2
X4 ≤ X3
X7 + X8 ≤ 2X10
(1 – X2) ≤ X1 + X5
X1 + X2 + X3 + X4 + X5 ≤ 5YA
X6 + X7 + X8 + X9 + X10 ≤ 5YB
2YB ≤ X6 + X7 + X8 + X9 + X10
All Xi, Yi are binary
b. Computer solution:
It recommends she take classes 2, 3, and 4.