BUSINESS 2400

Decision Modeling
Feedback Test # 2
Fall, 2014
Tuesday, November 4
c D.M. Tulett

For problems 2, 3 and 4, all constraints must have the variables on the left-hand side of the , =,
or sign, and their purpose stated. This test contains eight pages.

Given Name

Surname

Student Number
Section Number

(1 9:00-10:15; 2 10:30-11:45)

Please do not write in the space below.

Question #
Mark
Out of

Total

25

25

25

25

100

1. (25 marks) A linear optimization model has been made for a dairy where the variables are the number of litres of 1% milk, 2% milk and homogenized milk made each hour. The objective function is in
dollars; for example each litre of 1% milk gives a profit (selling price minus variable costs) of $0.21
(or 21 cents) each. There are four constraints (all in litres/hour): raw milk available; pasteurisation;
production; and shipping. The spreadsheet formulation (with final values) is:
A

B
C
D
1
DairyModel
2 OFV
X1
X2
X3
3
$1,897.50 1%Milk
2%Milk
Homo.Milk
4 Maximize
$0.21
$0.18
$0.23
5 litres/day
5750
0
3000
6
7 Constraints
8 RawMilkAvailable
0.9
0.85
0.8
9 Pasteurisation
4
4
4
10 Production
4
6
5
11 Shipping
0.5
0.4
0.45

7575
35000
38000
4225

RHS
40,000
35,000
38,000
20,000

Using the Sensitivity Report (given at the end), answer the following questions:
(a) (2 marks) By how much would the price per litre for 2% milk have to rise in order to make any
of it?

Checking the allowable ranges, determine what would happen to the objective function value in
each of the following situations (considered independently). (Assume that all proposed changes are
feasible.)
(b) (4 marks) The capacity to pasteurize milk increases by 4000 litres per hour.

(c) (5 marks) The variable cost of making 1% milk increases by 2.5 cents per litre. (Careful!)

(d) (14 marks) (i) The number of litres/hour increases by 2100 for pasteurisation, and by 1550 for
production.

(ii) The price per litre of 1% milk falls by 2 cents, and the price per litre of homogenized milk
increases by 3 cents.

VariableCells
Cell
Name
$B$5 litres/day1%Milk
$C$5 litres/day2%Milk
$D$5 litres/dayHomo.Milk

Final Reduced Objective Allowable Allowable

Value
Cost
Coefficient Increase Decrease
5750
0
0.21
0.02
0.026
0
0.07
0.18
0.07
1E+30
3000
0
0.23
0.0325
0.02

Constraints
Cell
$E$8
$E$9
$E$10
$E$11

Name
RawMilkAvailable
Pasteurisation
Production
Shipping

Final Shadow Constraint Allowable Allowable

Value
Price
R.H.Side
Increase Decrease
7575
0
40000
1E+30
32425
35000
0.0325
35000
3000
4600
38000
0.02
38000
5750
3000
4225
0
20000
1E+30
15775

2. (25 marks)
The following picture gives highway distances in kilometres between a set of cities. An earthquake
has destroyed a bridge on the road between cities 3 and 7, so this road is not shown on the map. Give
the algebraic model for finding the shortest path between cities 7 and 1.
53

2
44
50

1
@
@

@ 48
@
@
@

47

58

@
@

@
@

3
@
@

49

62 @
@

56@

42

64

3. (25 marks) Jennifer is making a large fruit salad for a party. She has everything she needs at
home, except for pineapples and bananas. She needs 12 pineapples, and 31 bananas. She goes to a
nearby fruit stand, where she finds two vendors selling bags of mixed fruit. Vendor 1 is selling bags
containing two pineapples and ten bananas for $12 per bag. Vendor 2 is selling bags containing four
pineapples and five bananas for $16 per bag. Vendor 1 bags have a mass of 2.8 kg; Vendor 2 bags
have a mass of 3.2 kg. Jennifer cannot carry more than 22.4 kg. She wants to know how many bags
she should buy from each vendor to meet (or exceed) the requirements for the salad, but at the least
cost possible.
(a) (9 marks) Formulate an integer model for this problem.

(b) (16 marks) On the graph below, draw the constraints and show the (linear) feasible region. On
this region show all the dots representing the feasible integer solutions. Determine the optimal values
for the two variables and the OFV, and give the recommendation.
8

6
X2
5

6
X1

4. (25 marks) There are six communities located along the Trans-Canada Highway, none of which
has a fast-food restaurant. A restaurant chain is considering opening up to three restaurants in the six
communities (no more than one restaurant per community). They believe that they will capture 20%
of the market in those communities in which a restaurant is constructed. Furthermore, they believe
that they will capture 10% of the market in any community which does not have its own restaurant
but which is contiguous to a community (on either or both sides) which does have a restaurant. Each
restaurant would have an annual overhead cost of $200,000. Each customer would give an annual
contribution to profit of $50. The population of each community is:
Community
1
Population (000s) 5

2 3
23 8

4
5 6
16 30 4

R = number of restaurants built.

N1 = population (in thousands) of communities with a restaurant.
N2 = population (in thousands) of communities without a restaurant of their own but which are
contiguous to a community which does have a restaurant.


1 a restaurant is built in community i
Yi =
i = 1, . . . , 6.
0 otherwise

1 a restaurant is not built in community i, but

a restaurant is built is a contiguous community

Zi =

0 otherwise

i = 1, . . . , 6.

Write the objective function and the constraints for this problem. DO NOT SOLVE. No marks
will be awarded for re-stating the definitions of the variables

This is extra space for completing any question.