X1 X2 X3 Y1 Y2 Y3 MAX

0 2000 0 0 1 0 6000000
2000 3000 4000
LHS RHS
STEEL 1.5 3 5 6000 <= 6000
LABOUR 30 25 40 50000 <= 60000
BIG M 1 1 0 <= 0
BIG M 2 1 2000 <= 99999
BIG M 3 1 0 <= 0
MIN Q 1 1 0 >= 0
MIN Q 2 1 2000 >= 1000
MIN Q 3 1 0 >= 0

MIN Q 1 - MIN QUANTITY REQUIREMENT

MIN Q 1000
BIG M 99999
 1 23 4
Units Product Grade JS57 LV1231 MRAB012 LRMH
Hours/MT Machine Time 1 1.5 1 1.5
MT/MT Raw Materials 1.2 0.504 1.1275 1
Hours/MT Labour 0.67 0.67 0.67 0.67
$/MT Selling Price 2297 1970 2340 2806
$/MT Production Cost 2189 1834 2102 1950
$/MT ProfitMargin 108 136 238 856
MT Market Demand 360 908 601 113

Production Constraints
1 Machine Hours available = 20,000
2 Raw Materials available = 7,000 MT
3 Labour Hours available = 6,000
4 At least 200 MT of JS-57 must be supplied
5 Grades LV-1231 and MRAB-012 must be supplied in the ratio of 60%:40%
6 Grades LR-MH and FQ-0002 must be supplied in the ratio of 1:9
7 No more than 600 MT of NT-OC may be supplied
8 For each grade produced, the initial 16 MT are "off specifications" and must be discarded. In ad

Objective fn: Max 1238328.79098

Decision variables
Grades y1 y2 y3 y4 y5
Quantity produces 216 0 0 129 1033
x1 x2 x3 x4 x5
Production decision (Yes/No) 1 0 0 1 1
s1 s2 s3 s4 s5
Supply 200 0 0 113 1017
Si=Yi-16Xi

Constraints

1 Machine hours 1 1.5 1 1.5 1.5

2 Raw material 1.2 0.504 1.1275 1 0.52
3 Labour hours 0.67 0.67 0.67 0.67 0.67
4 1 0 0 0 0

Si<=Di*Xi 1 0 0 0 0
it has 15 constraints in it 0 1 0 0 0
0 0 1 0 0
0 0 0 1 0
0 0 0 0 1
 0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0

5 0 2 -3 0 0
6 0 0 0 9 -1
7 0 0 0 0 0
 5 6 78 9 10 11 12 13 14
FQ0002 NTOC SW-S001 SW-FL008 LE-10-321 LE-12-321 GQL-PO-S2LV-1031 MRAB-112MRAB-22
1.5 2 2.5 3 2.5 1 2 2.5 2 1
0.52 1.265 0.601 1.069 0.8056 0.51 0.515 0.49 1.025 0.51
0.67 0.67 0.67 0.67 0.67 0.67 0.67 0.67 0.67 0.67
1970 2470 2033 2280 2050 1950 1990 1967 2183 2070
1845 2214 1855 2042 1885 1837 1843 1834 1958 1837
125 256 178 238 165 113 147 133 225 233
1025 643 1015 1645 1271 980 801 1522 877 249

0%:40%
9

tions" and must be discarded. In addition to lost production cost, there is also a $10,000 "disposal service fee" each time.

y6 y7 y8 y9 y10 y11 y12 y13 y14 y15

589.361 1031 1661 1047.863 0 817 1538 893 0 3.453E-14
x6 x7 x8 x9 x10 x11 x12 x13 x14 x15
1 1 1 1 0 1 1 1 0 0
s6 s7 s8 s9 s10 s11 s12 s13 s14 s15
573.361 1015 1645 1031.863 0 801 1522 877 0 3.453E-14

2 2.5 2.5 1 2 2.5 2 1 1.5

1.265 0.601 1.069 0.8056 0.51 0.515 0.49 1.025 0.51 0.51
0.67 0.67 0.67 0.67 0.67 0.67 0.67 0.67 0.67 0.67
0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
1 0 0 0 0 0 0 0 0 0
0 1 0 0 0 0 0 0 0 0
0 0 1 0 0 0 0 0 0 0
0 0 0 1 0 0 0 0 0 0
0 0 0 0 1 0 0 0 0 0
0 0 0 0 0 1 0 0 0 0
0 0 0 0 0 0 1 0 0 0
0 0 0 0 0 0 0 1 0 0
0 0 0 0 0 0 0 0 1 0
0 0 0 0 0 0 0 0 0 1

0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
1 0 0 0 0 0 0 0 0 0
 15
MRAB-117
1.5
0.51
0.67
2050
1837
213
299

" each time.

15599.88 <= 20000

7000 <= 7000
6000 <= 6000
200 >= 200

200 <= 360

0 <= 0
0 <= 0
113 <= 113
1017 <= 1025
 573.361 <= 643
1015 <= 1015
1645 <= 1645
1031.863 <= 1271
0 <= 0
801 <= 801
1522 <= 1522
877 <= 877
0 <= 0
3.453E-14 <= 0

0= 0
0= 0
573.361 <= 600
 X1 X2 X3 X4 X5 X6
0 0 0 0 1 0

Hard constraints
sigma Xi = 1 1= 1
0 0.1
Soft constraints y1+ y1-
size of facility 7.2 10.4 12.5 10.5 9.5 11.7 -1 1
parking space 8 12 15 8.5 12 15
response time 16 16 18 16 14.5 18
availability 8.5 9.5 7 8.5 8.5 7
siz of pop 16.6 14.4 11.25 11.125 11.05 10.08
road network 9 8 6.5 8.5 8.5 7
competitors 9 3 5 2 1 2
distance to market 2 3.2 15.4 4 2.5 10.5

From exhibit 5B
Mean sd mean-sd mean+sd weights
10.1 0.5 9.6 10.6 25
14.2 2.15 12.05 16.35 16
13.5 0.75 12.75 14.25 14
7.25 1.25 6 8.5 9
12.3 1.21 11.09 13.51 12
8.5 0.5 8 9 10
3.2 1.34 1.86 4.54 10
5.5 0.03 5.47 5.53 4

Solution
Criteria weights location chosen
mean 1 5
mean-sd 1 5
mean-sd 1 2
mean Exhibit 5B 2
mean-sd Exhibit 5B 5
mean-sd Exhibit 5B 2
 0 0.05 1.75 0 2.5 0 0 0.04 0.5 0
y2+ y2- y3+ y3- y4+ y4- y5+ y5- y6+ y6-

-1 1
-1 1
-1 1
-1 1
-1 1
 Min z
0 0.86 0 2.97 0.2828
y7+ y7- y8+ y8-
9.6 = 9.6
12.05 = 12.05
12.75 = 12.75
6= 6
11.09 = 11.09
8= 8
-1 1 1.86 = 1.86
-1 1 5.47 = 5.47