Linear Programming (LINDO Output) (Assignment Question 2 and 3)

1. CAT produces two models of heavy equipment – earthmoving equipment E2ZP and forestry
equipment F5ZM intended for the construction and lumber industries respectively. Both
models are produced in the same departments and with the same equipment. As per the
marketing department, the company will be able to sell as many models as it can produce in
the next month.
The company can make a profit of $5000 on each E2ZP that is sold and $4000 on each
F5ZM. Furthermore, each product is put through the machining operations in two
departments A and B which have a monthly capacity of 150 hours and 160 hours
respectively. Each E2ZP uses 10 hours of machining in department A and 20 hours in
department B whereas each F5ZM uses 15 hours in department A and 10 hours in
department B.
In order for the management to honor an agreement with the union, the total labor hours used
in next month’s testing of finished products cannot fall more than 10% below an arbitrated
goal of 150 hours. This testing is performed in a third department and has nothing to do with
the activities in departments A and B. Each E2ZP is given 30 hours of testing and each
F5ZM is given 10 hours.
In order to maintain the current market position, top management has decreed the operating
policy that it is necessary to build at least one F5ZM for every three E2ZP’s produced.
Lastly, a major customer has ordered a total of at least five E2ZP’s and F5ZM’s (in any
combination whatever) for next month, and so at least that many must be produced.

The formulation of the above problem is as follows:

MAX 5000E+4000F

SUBJECT TO

MINPROD) E + F  5 (Minimum Production)

MKTPOSN) E - 3F  0 (Market Position)

CAPA) 10E + 15F  150 (Capacity in Department A)

CAPB) 20E + 10F 160 (Capacity in Department B)

TESTHRS) 30E + 10F  135 (Testing Hours )

Where,
E = total number of units of E2ZP’s produced next month
F = total number of units of F5ZM’s produced next month

LINDO output of this model is as follows:

-----------------------------------------------------------------------------------------------------
LP OPTIMUM FOUND AT STEP 3

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 OBJECTIVE FUNCTION VALUE
1) 50500.00
VARIABLE VALUE REDUCED COST
E 4.5000 0.0000
F 7.0000 0.0000

ROW SLACK OR SURPLUS DUAL PRICES

2 6.5000 0.0000
3 16.5000 0.0000
4 0.0000 150.0000
5 0.0000 175.0000
6 70.0000 0.0000

RANGES IN WHICH THE BASIS IS UNCHANGED:

OBJ COEFFICIENT RANGES

VARIABLE CURRENT ALLOWABLE ALLOWABLE
COEF INCREASE DECREASE
E 5000.0000 3000.0000 2333.3332
F 4000.0000 3500.0000 1500.0000

RIGHTHAND SIDE RANGES

ROW CURRENT ALLOWABLE ALLOWABLE
RHS INCREASE DECREASE
2 5.0000 6.5000 INFINITY
3 0.0000 INFINITY 16.5000
4 150.0000 90.0000 47.1428
5 160.0000 73.3333 40.0000
6 135.0000 70.0000 INFINITY

Use the above LINDO output to answer the following questions:

a. Interpret the optimal solution, also explain the implication of all slack and surplus
variables.
b. What is the most that CAT would be willing to pay for an additional hour of labor for
testing?
c. What is the most that CAT would be willing to pay for an additional hour in
department B?
d. If only 130 hours were available in department A, what would be CAT‘s profits?
e. CAT enters into a new agreement with the union whereby the total number of hours
available for testing next month is 150 hours. How would this affect the profits that can
be made by CAT?
f. If the profit of E2ZP falls to $4000 per unit, would it have any impact on the profits? If
so, what?

1. Quality Air Conditioning manufactures three home air conditioners: an economy model, a
standard model, and a deluxe model. The profits per unit are Rs 63, Rs 95 and Rs 135 respectively.
The production requirements per unit are as follows:
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 Model Number of Fans Number of Cooling Manufacturing
Coils Time (Hours)

Economy 1 1 8

Standard 1 2 12

Deluxe 1 4 14

For the coming production period, the company has 200 fan motors, 320 cooling coils and
2400 hours of manufacturing time available. The linear programming model for problem and
computer solution is as follows:

MAX 63 E + 95 S + 135 D
Subject to
2) 1 E + 1 S +1 D <= 200 (fan motors)
3) 1 E +2 S + 4 D <= 320 (cooling coils)
4) 8 E +12 S +14 D <= 2400 (manufacturing time)
E≥0, S≥0, F≥0
End
OBJECTIVE FUNCTION VALUE
1) 16440.00
VARIABLE VALUE REDUCED COST
E 80.00 0.00
S 120.00 0.00
D 0.00 24.00

ROW SLACK OR SURPLUS DUAL PRICES

2) 0.00 31.00
3) 0.00 32.00
4) 320.00 0.00
RANGES IN WHICH THE BASIS IS UNCHANGED:

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 OBJ COEFFICIENT RANGES
VARIABLE CURRENT ALLOWABLE ALLOWABLE
COEF INCREASE DECREASE
E 63.00 12.00 25.5
S 95.00 31.00 8.0
D 135.00 24.00 INFINITY
RIGHT HAND SIDE RANGES
ROW CURRENT ALLOWABLE ALLOWABLE
RHS INCREASE DECREASE
2) 200.00 80.00 40.00
3) 320.00 80.00 120.00
4) 2400.00 INFINITY 320.00

Use the above LINDO output to answer the following questions:

a) What is the optimal solution and what is the value of the objective function?
b) Identify the binding (active) and inactive constraints.
c) Which constraint shows extra capacity and by how much?
d) If the profit for the deluxe model were increased to Rs 150 per unit, would the
optimum solution change?
e) What is the most that the company should pay for an extra cooling coil?
f) If 2100 hours of manufacturing time were available, what would be company’s
profit?
g) Write the dual of this optimization problem and state the optimal solution and the
corresponding objective function value of this dual problem.

2. Ballco manufactures large softballs, regular softballs and hardballs. Each type of ball requires
time in three departments: cutting, sewing and packaging as shown in following table:
Cutting Time Sewing Time Packaging Time
Regular Softballs 15 15 3
Large Softballs 10 15 4
Hardballs 8 4 2
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Because of marketing consideration, at least 1000 regular softballs must be produced. Each
regular softball can be sold for Rs3, each large softball can be sold for Rs5 and each hardball can
be sold for Rs.4. There are 18,000 minutes of cutting time, 18,000 minutes of sewing time, and
9000 minutes of packaging time available. Ballco wishes to maximize sales revenue. If we define
RS = number of regular softballs produced
LS = number of large softballs produced
HB = number of hardballs produced

Then appropriate LP is
Max Z = 3RS + 5LS + 4HB
Subject to
15RS + 10LS + 8HB ≤18,000 (Cutting constraint)
15RS + 15LS + 4HB ≤18,000 (Sewing constraint)
3RS + 4LS + 2HB ≤ 9,000 (Packaging constraint)
RS ≥1,000 (Demand constraint)
RS, LS, HB ≥ 0

The LINDO output is as given below:

MAX 3 RS + 5 LS + 4 HB
SUBJECT TO
2) 15 RS + 10 LS + 8 HB <= 18000
3) 15 RS + 15 LS + 4 HB <= 18000
4) 3 RS + 4 LS + 2 HB <= 9000
5) RS >= 1000
END
OBJECTIVE FUNCTION VALUE
1) 4500.000

VARIABLE VALUE REDUCED COST

RS 1000.000000 .000000
LS .000000 1.000000
HB 375.000000 .000000
ROW SLACK OR SURPLUS DUAL PRICES
2) 0 .00 .50
3) 1500.00 .00
4) 5250.00 .00
5) 0 .00 -4.50
NO. ITERATIONS= 2
RANGES IN WHICH THE BASIS IS UNCHANGED:
OBJ COEFFICIENT RANGES
VARIABLE CURRENT ALLOWABLE ALLOWABLE
COEF INCREASE DECREASE
RS 3.00 4.50 INFINITY
LS 5.00 .00 INFINITY
HB 4.00 INFINITY .00
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 RIGHTHAND SIDE RANGES
ROW CURRENT ALLOWABLE ALLOWABLE
RHS INCREASE DECREASE
2 18000.00 3000.00 3000.00
3 18000.00 INFINITY 1500.00
4 9000.00 INFINITY 5250.00
5 1000.00 200.00 1000.00

Use the above LINDO output to answer the following questions:

i) If regular softballs contributed Rs1 to Sales revenue, what would be the new optimal solution
and optimum value to the problem?
ii) By how much would an increase of 1 minute in the available sewing time increase Ballco’s
revenue?
iii) What is the most that Ballco should be willing to pay for an extra demand of regular softball?
iv) Assuming the current basis remains optimal, how would an increase of 100 in the regular
softball requirement affect Ballco’s revenue.

3. Ken and Larry, Inc., supplies its ice cream parlors with three flavors of ice cream –
chocolate, vanilla and banana. Because of extremely hot weather and a high demand for its
products, the company has run short of its supply of ingredients: milk, sugar and cream.
Hence, they will not be able to fill all the orders received from their retail outlets, the ice-
cream parlors. Owing to these circumstances, the company has decided to choose the amount
of each flavor to produce that will maximize total profit, given the constraints on supply of
the basic ingredients.
The chocolate, vanilla and banana flavors generate, respectively, $1, $0.9 and $0.95 of profit
per gallon sold. The company has only 200 gallons of milk, 150 pounds of sugar and 60
gallons of cream left in its inventory. The linear programming formulation for this problem is
shown below.

Let C = gallons of chocolate ice cream produced

Let V = gallons of vanilla ice cream produced
Let B = gallons of banana ice cream produced

MAX Z = 1C + 0.9V + 0.95B

Subject to
Milk: 0.45C + 0.5V + 0.4B  200 gallons
Sugar: 0.5C + 0.4V + 0.4B  150 pounds
Cream: 0.1C + 0.15V + 0.2B  60 gallons

C, V, B  0

The LINDO’s output is given below:

LP OPTIMUM FOUND AT STEP 3

6
 OBJECTIVE FUNCTION VALUE

1) 341.2500

VARIABLE VALUE REDUCED COST

C 0.000000 0.037500
V 300.000000 0.000000
B 75.000000 0.000000

ROW SLACK OR SURPLUS DUAL PRICES

MILK) 20.000000 0.000000
SUGAR) 0.000000 1.875000
CREAM) 0.000000 1.000000

NO. ITERATIONS= 3

RANGES IN WHICH THE BASIS IS UNCHANGED:

OBJ COEFFICIENT RANGES

VARIABLE CURRENT ALLOWABLE ALLOWABLE
COEF INCREASE DECREASE
C 1.000000 0.037500 INFINITY
V 0.900000 0.050000 0.012500
B 0.950000 0.021429 0.050000

RIGHTHAND SIDE RANGES

ROW CURRENT ALLOWABLE ALLOWABLE
RHS INCREASE DECREASE
MILK 200.000000 INFINITY 20.000000
SUGAR 150.000000 10.000000 30.000000
CREAM 60.000000 15.000000 3.750000

a. What is the optimal solution and total profits?

b. Suppose the profit per gallon of banana changes to $0.92, will the optimal solution
change, and what can be said about the effect on total profit?
c. Suppose the company discovers that 3 gallons of cream have gone sour and so must be
thrown out, will the optimal solution change, and what can be said about the effect on
total profit?
d. Suppose the company has the opportunity to buy an additional 10 pounds of sugar at a
total cost of $15, should it go for this? Explain.
e. Suppose the profit per gallon of vanilla changes to $0.96, will the optimal solution
change? What can be said about the effect on total profit?
f. Why, as per your analysis, do you think chocolate ice cream is not being produced? What
should be done for it to be considered for production?
g. What will be the effect on the optimal solution of adding an additional 50 gallons of milk
in inventory?
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