QMT 128 HW#1 Due: Tuesday June 26, start of class Instructions: Submit your solution on paper, may

be done individually or in pairs.

1. (4 pts) From Taha, solve Problem 5, Problem set 6.2A, p. 238. Sketch the network on your paper and highlight the chosen arcs. On the side, provide the sequence of choosing the nodes as the required pipeline network is constructed. 2. (8 pts) Adapted from R. Rardin, Optimization in Operations Research, Prentice-Hall International, 1998. A pharmaceutical manufacturer must supply 30 batches of its new medication in the next quarter, then 25, 10, and 35 in successive quarters. Each quarter in which the company makes product requires a $100,000 setup, plus $3000 per batch produced. There is no limit on production capacity. Batches can be held in inventory, but the cost is a high $5000 per batch per quarter. The company seeks a minimum total cost production plan. Note: batches must be produced all or nothing (i.e., no splitting of the quantities above). a. Explain how this can be modeled as a shortest-route problem by describing what nodes and arcs will represent. b. Sketch the network, label the nodes and arcs properly. c. Solve a shortest-route problem on your network to compute an optimal production plan. Show complete node labeling and updating. d. State the optimal production plan and how much it will cost.