Aire-Co produces home dehumidifiers at two different plants in Atlanta and Phoenix.

The per unit cost of production in At

Inventory holding costs are assessed at $30 per unit in beginning inventory each month. Aire-Co estimates the demand for
this demand at minimum cost. a. Formulate an LP model for this problem. b. Implement your model in a spreadsheet and
least 50 units per month? e. How does the solution change if each p

a. Optimal Solution
Atlanta Phoenix
Per unit cost 400 360
Max production/month 300
Holding cost 30

Beginning Inventory Atlanta Phoenix Total Units Demand

Month 1 0 0 300 300 300
Month 2 0 100 300 400 400
Month 3 0 200 300 500 500
Total units produced 300 900

COP 444000
The per unit cost of production in Atlanta and Phoenix is $400 and $360, respectively. Each plant can produce a maximum of 300 units pe
. Aire-Co estimates the demand for its product to be 300, 400, and 500 units, respectively, over the next 3 months. Aire-Co wants to be ab
nt your model in a spreadsheet and solve it. c. What is the optimal solution? d. How does the solution change if each plant is required to
w does the solution change if each plant is required to produce at least 100 units per month?
 ce a maximum of 300 units per month.
months. Aire-Co wants to be able to meet
nge if each plant is required to produce at
b. Atleast 50 units/month
Atlanta Phoenix
Per unit cost 400 360
Max production/month 300
Holding cost 30
Minimum requirement 50

Beginning Inventory Atlanta Phoenix Total Units Demand

Month 1 0 50 300 350 300
Month 2 50 50 300 400 400
Month 3 0 200 300 500 500
Total units produced 300 900

COP 445500
c. Atleast 100 units/month
Atlanta Phoenix
Per unit cost 400 360
Max production/month 300
Holding cost 30
Minimum requirement 100

Beginning Inventory Atlanta Phoenix Total Units Demand

Month 1 0 100 200 300 300
Month 2 0 100 300 400 400
Month 3 0 200 300 500 500
Total units produced 400 800

COP 448000
 Valu-Com Electronics manufactures five different models of telecommunications interface cards for PCs and laptops. As sum
next production period, Valu-Com has 80,000 square inches of PC board, 100,000 resistors, 30,000 memory chips, and 5,0
company produces at least 500 units of each product and at least twice as many FastLink cards as HyperLink cards while m
optimal solution? d. Could Valu-Com mak

Hyperlink Fastlink Speedlink Microlink Etherlink

Produced 500 1000 1500 2250 500
Manufacturing cost 136 101 96 137 101
Wholesale price 189 149 129 169 139
Profit 53 48 33 32 38

Printed curcuit board Resistors Memory chips Assembly labor hours

Required 60500 100000 30000 3687.5
Available 80000 100000 30000 5000

Minimum requirement 500

Total Profit 215000

ards for PCs and laptops. As summarized in the following table, each of these devices requires differing amounts of printed circuit board, r
s, 30,000 memory chips, and 5,000 hours of assembly time available. The company can sell all the product it can manufacture, but the ma
ards as HyperLink cards while maximizing profit. a. Formulate an LP model for this problem. b. Create a spreadsheet model for this probl
olution? d. Could Valu-Com make more money if it schedules assembly workers to work overtime?
unts of printed circuit board, resistors, memory chips, and assembly. In its
t can manufacture, but the marketing department wants to be sure the
eadsheet model for this problem and solve it using Solver. c. What is the
 The Molokai Nut Company (MNC) makes four different products from macadamia nuts grown in the Hawaiian Islands: cho
(Crunch), and plain roasted nuts (Roasted). The company is barely able to keep up with the increasing demand for these prod
ensure it is operating in the most efficient manner possible. To meet marketing demands for the coming week, MNC needs t
more than 150 pounds of the Crunch product, and no more than 200 pounds of the Roasted product. Each pound of the W
with the remaining weight made up of chocolate coating. The company has 1100 pounds of nuts and 800 pounds of chocola
nuts, roast the nuts, coat the nuts in chocolate (if needed), and package the products. The following table summarizes the tim
a. Formulate an LP model for this problem. b. Create a spreadsheet model for th

Whole Cluster Crunch Roasted Nuts Chocolate

Produced 1000 500 80 200 Required 1016 764
Limit 1000 400 - 500 150 200 Available 1100 800
% of Nut 0.6 0.4 0.2 1
% pof chocolate 0.4 0.6 0.8 0
Variable cost 3.15 2.6 2.16 3.1
Selling price 5 4 3.2 4.5
Profit 1.85 1.4 1.04 1.4

Hulling 600 200 16 200 1016

Roasting 1200 400 32 400 2032
Coating 600 200 16 200 1016
Packaging 2500 800 100 200 3600
Max machine time 3600 3600 3600 3600

TOTAL PROFIT 2913.2

 n the Hawaiian Islands: chocolate-coated whole nuts (Whole), chocolate-coated nut clusters (Cluster), chocolate-coated nut crunch bars
asing demand for these products. However, increasing raw material prices and foreign competition are forcing MNC to watch its margins
coming week, MNC needs to produce at least 1,000 pounds of the Whole product, between 400 and 500 pounds of the Cluster product, n
oduct. Each pound of the Whole, Cluster, Crunch, and Roasted product contains, respectively, 60%, 40%, 20%, and 100% macadamia nuts
and 800 pounds of chocolate available for use in the next week. The various products are made using four different machines that hull th
ng table summarizes the time required by each product on each machine. Each machine has 60 hours of time available in the coming wee
a spreadsheet model for this problem and solve it using Solver. c. What is the optimal solution?
 olate-coated nut crunch bars
ing MNC to watch its margins to
ounds of the Cluster product, no
%, and 100% macadamia nuts
different machines that hull the
e available in the coming week.
 A company is trying to determine how to allocate its $145,000 advertising budget for a new product. The company is co
advertising in these different media and the number of new customers reached by increasing amounts of advertising. For ins
next 10 newspaper ads will cost $900 and is expected to reach 700 new customers. Note that the number of new custome
more than 30 newspaper ads and no more than 15 television ads. a) Formulate an LP model for this problem to maximiz
solution? d) Suppose the number of new customers reached by 11–20 newspaper ads is 400 and the number of new cust
optimal solution? What (if an

Total no. of new

No of new customers Cost per Sets of customers Total cost
reached ad each ad reached of ads
Newspaper 1 - 10 900 1000 10 9000 10000
Newspaper 11 - 20 700 900 10 7000 9000
Newspaper 21 -30 400 800 0 0 0
Television 1 - 5 10000 12000 5 50000 60000
Television 6 - 10 7500 10000 5 37500 50000
Television 11 - 15 5000 8000 2 10000 16000
Total 113500 145000

Budget 145000
new product. The company is considering newspaper ads and television commercials as its primary means for advertising. The following t
g amounts of advertising. For instance, each of the first 10 ads the company places in newspapers will cost $1,000 and is expected to reac
hat the number of new customers reached by increasing amounts of advertising decreases as the advertising saturates the market. Assum
odel for this problem to maximize the number of new customers reached by advertising. b) Implement your model in a spreadsheet and s
400 and the number of new customers reached by 21–30 newspaper ads is 700. Make these changes in your spreadsheet and reoptimize
optimal solution? What (if anything) is wrong with this solution and why?
or advertising. The following table summarizes the costs of
$1,000 and is expected to reach 900 new customers. Each of the
g saturates the market. Assume the company will purchase no
r model in a spreadsheet and solve it. c) What is the optimal
r spreadsheet and reoptimize the problem. What is the new
 Shipping costs
Men's Women's Junior's
Daytona Tempe Daytona Memphis Tempe Memphis Tempe
Sacramento 51 10 49 33 9 31 8
Denver 28 43 27 22 42 21 40
Pittsburgh 36 56 34 13 54 12 52

Sacramento Denver Pittsburgh

Men's 700 550 900
Women's 900 1000 1200
Junior's 900 1500 1100
Minimum of Men's 630 495 810
Minimum of
Women's 810 900 1080
Minimum of
Junior's 810 1350 990

Units shipped
Daytona Memphis Tempe Total
Men's 0 0 630 630
Sacramento Women's 0 0 810 810
Junior's 0 0 810 810
Men's 495 0 0 495
Denver Women's 0 900 0 900
Junior's 0 1350 0 1350
Men's 810 0 0 810
Pittsburgh Women's 0 1080 0 1080
Junior's 0 990 0 990
Total 1305 4320 2250

Total Shipping Cost 137160

 Clubs produced
Daytona Memphis Tempe Total
Men's 1 0 0 1
Women's 1498 3000 0 4498
Junior's 0 0 3750 3750

Resources required
Men's Women's Junior's Total
Titanium 2.9 2.7 2.5
Aluminium 4.5 4 5
Rock Maple 5.4 5 4.8

Resources Used
Daytona Memphis Tempe
Men's 2.9 0 0
Titanium Women's 4044.6 8100 0
Junior's 0 0 9375
Men's 4.5 0 0
Aluminium Women's 5992 12000 0
Junior's 0 0 18750
Men's 5.4 0 0
Rock Maple Women's 7490 15000 0
Junior's 0 0 18000
Total Titanium 4047.5 8100 9375
Total Aluminium 5996.5 12000 18750
Total Rock Maple 7495.4 15000 18000

Resouces available
Daytona Memphis Tempe
Titanium 4500 8500 14500
Aluminium 6000 12000 19000
Rock Maple 9500 16000 18000

Total clubs produced 8249