Homework 3

Individual Submission: Aaryaman Maheshwari (10230056)

Discussion: Neil John (10232513)

1. EndRun Construction Company

(A)

Decision Variable:
Let Zi = The Binary Variable where if:
Zi = 1, then project is selected
Zi = 0, then project is not selected

Objective Function:
Max: (Z1 * 250) + {Z2 * (-50)} + (Z3 * 218) + (Z4 * 300) + (Z5 * 300)

Constraint:
Let,
Yij = Cash flow from project ‘i’ in year ‘j’ where (i = 0, 1, 2, 3, 4, 5) & (j = 0, 1, 2, 3, 4, 5)

(Zi * Yij) >= -2,000 &

All Zi = bin that is, binary

(B)

If we ignore the selection of Project 2 made by the Solver for Year 0, then selection of just
Projects 1, 3 and 5 would give us a cash flow of (-800 – 400 – 950 = -2,150). This breaks the
constraint of the company’s maximum spending. Similarly, selection of Project 4 would also
exceed our spending as well.
Hence, selection of project 2 gives us the optimal as it balances out the cash flow.
2. The Box Problem

Decision Variable:
Let,
Xi = Quantity of i boxes to be produced
Yi = Binary Variable where if:
Yi = 1 then, Box is produced
Yi = 0 then, Box is not produced

Objective Function:
Min: (X1 * 33) + (X2 * 30) + (X3 * 26) + (X4 * 24) + (X5 * 19) + (X6 * 18) + (X7 * 17) +
[1000 * (Y1 + Y2 + Y3 + Y4 + Y5 + Y6 + Y7)]

Constraints:
Xi – (2700 * Yi) <= 0 where, all Yi = bin that is, binary
X1 >= 400
X1 + X2 >= 700
X1 + X2 + X3 >= 1,200
X1 + X2 + X3 + X4 >= 1,900
X1 + X2 + X3 + X4 + X5 >= 2,100
X1 + X2 + X3 + X4 + X5 + X6 >= 2,500
X1 + X2 + X3 + X4 + X5 + X6 + X7 >= 2,700