102 Chnpar 3 lovofuton ttia Fogg ‘Schedules A and B both have the same production level during each period. This means that both schedules will have identical inventory costs. Also, both schedules are feasible, ‘but schedule B incurs more overtime costs than schedule A. Thus, in minimizing costs, schedule B (or any schedule having y, > O and x, < 40) would never be chosen, In reality, an LP such as Example 12 would be implemented by using a rolling horizon, ‘which works in the following fashion. After solving Example 12, Sailco would implement coly the quarter 1 production strategy (produce 40 boats with regular-time labor), Then the company would observe quarter 1’s actual demand. Suppose quarter I's actual demand is 35. boats. Then quarter 2 begins with an inventory of 10 +40 ~ 35 = 15 boats. We now make a forecast for quarter 5 demand (suppose the forecast is 36), Next determine production for quarter 2 by solving an LP in which quarter 2s te first quarter, quarter 5 isthe final quarter, and beginning inventory is 15 boats. Then quarter 2’s production would be determined by solving the following LP: min ¢ = 400(4, +45 x, +.%5) + 450095 + 95 +94 HQ) +200, +a HH FE St S40 S40, SMO, x <4. =i tay ty 75 i bxe tye 36 {quarter 5's regular-time production, ys = quarter 5's overtime production, and yuarter 5°s ending inventory. The optimal values of x, and y) for this LP are then used to determine quarter 2's production. Thus, each quarter, an LP (with a planning horizon of four quarters) is solved to determine the current quarter's production. Then current demand is observed, demand is forecasted for the next four quarters, and the process repeats itself. This technique of “rolling planning horizon” is the method by which most dynamic or multiperiod LP models are implemented in real-world applications. (Our formulation of the Sailco problem has several other limitations, 1 Production cost may not bea linear function of the quantity produced. This would violate the Proportionality Assumption, We discuss how to deal with this problem in Chapters 9 sand 20, 2 Future demands may not be known with certainty. In this situation, the Certainty Assumption is violated. In Chapter 21, we explain how the present model can be extended to allow for uncertain demands, 3) We have required Saileo to meet all demands on time. Often companies can meet demands during later periods but are assessed a penalty cost for demands that ate not met ‘on time. For example, if demand is not met on time, customer displeasure may result in @ Joss of future revenues. If demand can be met during later periods, we say that demands can be backlogged. Our present LP formulation can be modified to incorporate bucklogging (see Problem 1 of Section 4.12) 4 We have ignored the fact that quarter-to-quarter variations in the quantity produced may result in extra costs (called production-smoothing costs.) For example, if we increase production a great deal from one quarter to the next, this will probably require the costly training of new workers. On the other hand, if production is greatly decreased from one {quarter to the next, extra costs resulting from laying off workers may be incurred In Section 4.12, we moully the present model to account for smoothing costs, Ifany sailboats are lef at the end of the last quarter, we have assigned them a value of zero. This is clearly unrealistic. [a any inventory model with finite horizon. the inventory left at the end of the kist period should be assigned a salvage value that is indicative of —rrr a0 the worth of the final period’s inventory, For example, at the end of quarter 4 is worth $400, a term —400%, (mi Ling oa Pega Soe Mugg Duso bles Aa ay 103 1 Sailco feels that each sailboat left suring the worth of quarter 4's inventory) should be added to the objective function, Problems Group A TA customer requires dring the next Four months, re spectively. 50, 65. 100, and 74 units of a commestty (no hocklowging iy allowed). Praduction costs are $5, 8, $4 and $7 per Unit during these months. The storage cost irom fone month 40 the next is $2 per unit (assessed on enn inventory). Its estimated that each nit on hand atthe en fof mont 4 could be sold Yor $6, Formulate an LP that will ‘minimize the net cost incurred in meeting the demas of the ext Fonte months, 2 Acompany faces the following demands daring the next three perio: period 1, 20 units: period 2, 10 units; period 3,15 units. The unit production eost duving each period is 4 follows: period 1, $13: period 2. S14; period 3, SIS. A. holding cost of $2 per unit i assessed against each periods i inventory. AC the beginning of pesto 1, the company has Suits on hana In realty, not all goods produced ding a month can he uscd fo met the current month's demand. To mel this Fact, we assume that only one half of the goods produced during a period cat be used to meet the current periods demands. Formulate an LP to minimize the coxt of meeting the demand for the next three petiods. «fine: Constraints sich as j, = x, +5 ~ 20 are certainly needed, Unlike aur example, however he constraint i, > 0 will not ensue that petiod 1's demand is met, For example, if ¢, — 20. then 4, > Dill hold, but since only $(20) = 10 units of period | Prediction can be used to moet period I's demand, 6, = 20 ‘woul not be Feasible. Ty to think of a type of constraint ‘ht ill ensure hat aha is availible 10 meet each period's demand is at least as lage as tht periods demand) Group B 3 JumesB Duing an ie dikes cheesevakes snd Black Forest cakes, tnonth, he can bake at most 65 cakes. The costs tke and the demands for cakes, which must be met on listed in Table 29. costs SO¢ to hak a cheesecake, ke tohold a Black Forestcake. in inventory fora month, TABLE 29 Mosh 1 $3.00 S250 Cheesecake Black Forest Month 3 a w Formulate an LP 10 minimize the total cost of next three months’ demands 4 mannfacturing company produces two types of prod Ucts: A and B. They have agreed ro deliver the products om the schedule shown in Table 30, The company has wo as sembly lies, 1 and 2, with the available production hours shown in Table 31. The production rates for each assembly Tine and product combination, in terms of hours per prodict, ane shown in Table 32. It takes 0,15 hour to manufacture Unit of product A on Tine 1, and soon, costs $5 per hour of| Tine time to produce any prolact. The inventory carrying cost Per month for each proluct is 20¢ per unit (charged! on TABLE 30 a so 000) 2000 000) March 31 April 30 TABLE 31 Production Hous Avaable Sette? March Apr 800 00 2000) op TABLE 32 Production Ret Product A Product B ous, oR 0.16 on nd syle104 Capi d month's ending inventory). At present, there ate 500 units of ‘Avand 750 units of B in inventory. Management would like at least 1000 units of each product in inventory atthe end of April, Formulate an LP to determine the production schedule «hat minimizes the total cost incurred in meeting demands on ‘ime, 5 During the next so months, General Cars must meet {on time) the following demands for tucks and ears: month 1-400 trucks, 800 cars; month 2—300 trucks, 300 cars, During each month, at most 1000 vehicles can be produced, ach trick uses 2 fons of steel, and each car uses I ton of | steel. During month 1, steel costs $400 per tn: doing month 2, steel costs $600 per ton, At most 1500 tons of steel may be purchased each month (steel may only be used during the month in which itis purchased). At the beginning of month 1, 100 trucks and 200 cars rein inventory. Atthe end ofeach month, a holding cost of $150 per vehicle is assessed. Each car gets 20 mpg, and each truck gets 10 mpg, During each month, the vehicles produced by the company must average atleast 16 mpg. Formulate an LP to mectthe demand and mileage requirements at minimum cost (include stel costs and holding cost) 6 Gandhi Clothing Company produces shirts and pants. Each shirt requires 2 sq ye of cloth, each pair of pants, 3 During the next two months, the Following demanal for shirts and pants must be met (on time}: month |—1Oshirts, 15 pats ‘of pants; month 2—12 shirts, 14 pairs of pants. During each ‘month, the following fesources are available: month 190) 4 y6 of cloth: month 260 sq yd. (Cloth that is available using: month I may, i unused during month 1, be used ‘during month 2.) During each month, it costs $4 10 make an article of clothing with regulartime labor and SS with overtime labor Daring each month, a total of at most 25 articles of closing may be produced with regulartime labor, and an unlimited number of aticles of clothing may be produced with overtime Tabor. At the end of each month, a holding cast of $3 per atic of clothing is assessed. Formulate an LP that can be used to meet demands for the next two months (on ime) at ‘minimum cost. Assume that atthe beginning of month 1, 1 Shirt and 2 pairs of pants are available 7 Each year, Paynothing Shoes faces demands (which ‘must he met on time) for pais of shoes as shown in Ta ble 33, Workers work three consecutive quarters and then receive one quarter olf. For example, a worker may work during quartets 3 and 4 oF one year-and quarter | of the next london ie Pagani TABLE 33 uerer 1 Quarter? Guerter3Ourter 4 oo 30081 year During a quarter in which a worker works, he or she can produce up to SO pais of shoes. Fach workers paid $500 per ‘quarter. At the end of each quarter, a holding cost of $50 per pair of shoes is assessed, Formulate an LP that can be used to minimize the cost per year (labor + holding) of meeting the demands for shoes, To simplify matters, assume that at the end of each year, the ending inventory is zero. (it: It is allowable to assume that a given worker will et the same quarter off during each year) 8 Accompany must meet (on time) the following demands ‘quarter |—30 units; quarter 2—2 nits; quarter 340 units ach quarter, up to 27 units ean be produced with regular time labor, a a cost of $40 per unit. During each quarter, an unlimited number of units can be produced with overtime Tabor, at a cost of $60 per unit. OF all units produced. 20% are unsuitable and cannot be used to meet demand. Also, at the end of each quarter, 10% ofall units on hand spoil and cannot be used to meet any future demands. After each ‘quarter's demand is satisfied and spoilage is accounted for. a cost of S15 per unit is assessed against the quarters en inventory. Formulate an LP that can be used to minimize the total cost of meeting the next three quarters’ demand Assume that 20 usable units are available atthe beginning of quarter | 9 Donovan Enterprises produces eletic mixers. During tho next four quarters, the following demands for mixers must be met on time: quarter 4000; quarter ~2000; quarter 33000; quar 410,000. Each of Donovan's workers ‘works three quarters of the year and gets one quater of. “hus a worker may werk daring quarters 1.2, and 4nd get «quarter 3 off Bach worker is paid $30,000 per Year and if ‘orking) can produce upto 300 mixers during quarter. At the end of each quarier, Donovan incurs holding cost of 530 per mixer on each mixer in inventory, Formolate a0 LP to help Donovan minimize the cost (labor and inventory) of tmeating the next yer’ demand (on tne). A the heginning Of quarter 1,600 mixers are anailabl 3.11 Multiperiod Financial Models ‘The following example illustrates how linear programming can be used! © model multi period cash management problems. The key is to determine the relations of cash on hand during different periods,Qa. 3.01 Wali Fin ales 105 [18° Finco Investment Corporation must determine investment strategy for the firm during the next three years, At present (time 0), $100,000 is available for investment, Investments A B,C, D, and E are available. The cash flow associated with investing $1 in each investment is given in Table 34. For example, $1 invested in investment B requires a$1 cash outflow at time I and returns ind $1 at time 3. To ensure that the company’s portfolio is diversified, Finco Fequites that at most $75,000 be placed in any single investment, In addition to investments AME, Finco can earn interest at 8% per year by keepin funds. Returns from investments may be immediately reinvested, For example, the positive ceash flow received from investment C at time [ may immediately be reinvested in inv BB. Finco cannot borrow funds, so the cash available for investment at any time is limited to ‘cash on fiand, Formulate an LP that will maximize eash on hand at time 3 attime uninvested cash in money market Solution Finco must decide how much money should be placed in each investment (including market funds). Thus, we define the following decision variables: a B= dollars invested in investment B, dollars invested in investment A C= dollars invested in investment C D = dollars invested in investment D = dollars invested in investment E S, = dollars invested in money market funds at timer (t = 0.1.2) FFinco wants to maximize cash on hand at time 3, At time 3, Finco’s eash on hand will be the sum of all cash inflows at time 3. From the description of investments AE and the fact ‘hat from time 210 time 3, S; will inerease to 1.085, Time 3 cash on hand = B + LOD + 1.56 + 1.088, Thus, Finco’s objective function is mmx: = B+ 19D + LSE + 1.088, (62) In multiperiod financial models, the follow decision variables from diferent perio Cash available at time r = cash invested at time + + uninvested cash at time that is cartied over to time t+ (os lw a Tine Bost St S050 St csi SI <0 dD si so S19 0 0-8 SI105 Clytr3 luce tina: Rogameg If we classify money market funds as investments, we see that Cash available at time ¢ = cash invested at time ¢ (63) Since investments A, C, D.and §, are available at time 0, and $100,000 is available at time 0, (63) for time 0 becomes. 100,000= A+C+D45, (6 Attime 1, 0.54 + 1.2C + 1.085, is available for investment, and investments B and S, are available. Then for f = 1, (63) becomes 054 +1.2C + 1085, = B+ S, (65) Attime 2, A-+0.5B + 1.085, is available for investment, and investments E and 5, are available. Thus, for 1 = 2, (63) reduces to A405B-+ 1.085, = +5; (66) Let's not forget that at most $75,000 can be placed in any of investments A~E. To take care of this, we add the constraints, A= 75,000 en, B= 75,000 (68) © <75,000 69) D = 75,000 70, E = 75,000 ” Combining (62) and (64)-(71) with the sign restrictions (all variables > 0) yields the following LP: max 2 = B+ 19D -+15E + 1.088, su A4C+ D+, = 100,000 0.94 +1.2C + 1.085, = B+ 5, A+05B +1085, = +S, A$ 75,000 B = 75,000 C= 75,000 D = 75,000 E = 75,000 =0 A,B C.D, E.Sy We find the optimal solution to be z = 218,500, A = 60,000, # = 30,000, D = 40,000, E = 75,000, C = S, = S, = S, = 0. Thus, Finco should not invest in money market funds, At time 0, Finco should invest $60,000 in A and $40,000 in D. Then, at time 1, the $30,000 cash inflow from A should be invested in B. Finally, at time 2, the $60,000 cash inflow from A and the $15,000 cash inflow from B should be invested in E. At time 3, Finco’s $100,000 will have grown to $218,500.{LIT Mipsis 107 ‘The reader might wonder how our formulation ensures that Fineo never invests more ‘money at any time than the firm has available. This is ensured by the fact that each variable SS, must be nonnegative. For example, 5, is equivalent t0 100,000 - 4 ~C~ D = 0, which ensures that at most $100,000 will be invested at time 0, Problems Group A 1 A.consuhant wo Fineo claims that Finco's cash on hand stim 3 isthe sum ofthe cash inflows from al investments hot jst those investments yielding a cash inflow at time 3 Thus, she consultant claims that Fineo's objective function shoul be SA 415841204190 +15E + LOSS, + LO8S, + 1.088, Explain why the consultant is incorrect. 2 Show that Finco's objective Funetion may also be written mans = 100,000-40.54 4058 +0.2¢ +090 ++0SE +0485, +0.085, +0.085, 32Avtime 0, we have $10,000, Investments A and B are available; thei eash flows are shown in Table 35. Assume that any money not invested in A or B earns no interes, Formulate an LP that will mavimmize cash on band at tine 3 ‘Can you guess the optimal solution to this problem’? Group B 4° Broker Steve Johnson is currently tying 10 n his profit im the bond market. Four honkls ave available for Purchase and sale, with the bid and ask price ofeach bond as shown in Table 36, Sieve can buy up 19 100 units of each bro at the ask price or sell wp fo HDX) units of each bona at the bid price. During each ofthe next three years, the person TABLE SS aoa Timed $180) Time $2 St Time? SS $0 Times $0 $1.9 TABLE 36 Pie Ask Pie Bond | 980990, Bond? 970985 Bond3 960972 Bonds 980954 TABLES? oor ond! Sond? Bond Bond 4 ie oO ee eo tco) nT er ) 3 1100-1120, 10901110 ‘who sells a bond will pay the owner of the bond the cash payments shown in Table 37. Steve's goal is 10 maximize his cevenue from selling bonds less his payment for buying bonds, subject the con strain that after each year's payments are received, his cur rent eash position (due only to cash payments from bonds and not purchases or sale of honds) is nonnegative, Assume that cash payments are discounted, ith a payment of ST of year from now being equivalent to a payment of 908 a0. Formulate an LP to maximize net profit from buying and selling bonds, subject tothe arbitrage constraints previously described. Why do you think we limit she number of units of each bond that can be bought oF sold? 5 Asiall toy store, Toyeo projcetsthe monthly cash Hows {in thousands of dollars) in Table 38 during the year 2000, A negative exsh flow means that cash outflows exceed cash TABLE 38 ash How Cash ow January 12 July 7 February —10 August 2 March 8 September 15 April 10 October 2 May 4 November 7 une 5S December 4108 Cupor3Inoion Lear epaming inflows to the business. To pay their bills, Tayo will need to ‘borrow money early inthe year, Money ean be borrowed in wa ways 11 Taking out a long-term one-year loan in January. Lnnerest of 1% is charged each month, and the loan must be paid back atthe end of December 'b Each month money can be borrowed from a short- term hank line of ened, Here, a monthly interest rate of 1.5% is charged. All short-term loans must be paid off atthe end of December. Atthe end of each month, excess cash earns 0.4% inter et. Formulate an LP whose solation will help Toyeo maxi ‘nize their eash positon a the hoginning of January, 2001 6 Consider Problem 5 with the following modification Each month Toyco cun delay payments on some or all ofthe cash owed for the current month, This is called "stretching Payinents.” Payments may be stretched for only one month and a 1% penalty is charged on the amount stretched, Thus, iF they stretch payments on $10,000 cash owed in January, hey must pay 10,000(1.01) = $10,100 in February. With this modification, formulate an LP that would help Toyeo ‘maximize their cash on hand atthe beginning of January I. 2001 3.12. Multiperiod Work Scheduling {In Section 3.5, we saw that linear programming could be used to schedule employees in Static environment where demand did not change over time. The following example (a ‘modified version of a problem from Wagner (1975)) shows how LP ean be used to schedule employee training when a firm faces demand that changes over time. EAM PLE 14 CSLis a chain of computer service stores, The number of hours of skilled repair time that CSL requires during the next five months is as follows: Month 1 January): 6000 hours Month 2 (February): 7000 hours ‘Month 3 (March): $000 hours Month 4 (April): 9500 hours Month 5 (May): 11, 000 hours At the beginning of January, 50 skilled technicians work for CSL, Each skilled technician ‘can work up to 160 hours per month. In order to meet future smands, new technic ‘must be trained. It takes one month to train 4 new technician, During the month of training, ‘trainee must he supervised for 50 hours by an experienced technician. Each experienced technician is paid $2000 a month (even if he or she does not work the full 160 hous) During the month of training, a trainee is paid $1000 a month. Ac the end of each month, 5% of CSL’s experienced technicians quit t join Plum Computers. Formulate an LP whose solution will enable CSL to minimize the labor cost incurred in meeting the service requirements for the next five months. Solution CSL must determine the number of technicians that should be trained during month ¢ (r= 1.2,3,4,5). Thus, we define x, = number of technicians trained during month #(¢ 2.34.5) CSL wants 10 minimize total labor cost during the next five months. Note that Total labor cost = eost of pay g trainees + cost of paying experienced technicians.312 Muiped Wak Sbiteg 109 3.4.5, To express the eostof paying experienced technicians, we need todefine, for? = | 1, = number of experienced technicians at the beginning of month r Then fotal labor cost (100%, + L000, + 100%, + 1000x, + 10008) + (2000), + 2000, + 2000, + 2000, + 20003) ‘Thus, CSL’s objective funetion is min: = 1000s, + 1000¢, + 1000x, + 1000x, + 1000x, + 2000y, + 2000, + 2000y, +2000, + 20000, What constraints does CSL face? Note that we are 1,2. 3.4,5, CSL must ensure that iven y, = 50, and that for 1 = {umber of available technician hours during month 1 N ke 1g month, a = Number of technician hours required during month 1 nce each trainee requires SO hours of experienced technician time, and each skilled technician is available for 160 hours per month, Number of available technician hours during month 160), ~ 50%, Now (72) yields the following five constraints 160y, ~ 50x, = 6000 (Month 1 constraint) 160), — 50x, = 7000 (Month 2 constraint) 160), ~ 50x, = $000 (Month 3 constraint) 160y, ~ 50x, = 9500 (Month 4 constraint) [ody — 50x, = 1,000 (Month $ constraint) As in the otler multiperiod formulations, we need constraints that relate variables from different periods. In the CSL problem, itis important to realize that the number of skilled technicians available at che beginning of any month is determined by the number of skilled technicians available during the previous month and the number of technicians trained during the previous month: Experienced technicians a at beginning of month r at be; + technicians trained during month (7 ~ 1) silable _ experienced technicians available ginning of month (7 ~ 1) 3) ~ experienced technicians who quit ducing month (= 1) For example. for February. (73) yields Y= M$ —0.05y, ory, = 0.95y, +8, Similarly, for March, (73) yields 01.955, +ee ee 110 Chul'3 nmin ie egemig ‘and for April, yy = 0.95), +5 ‘and for May. [Adding the sign restrictions x, = O and y, > 0.(¢ = 1.2, 3.4.5), we obtain the following LP: 1000s, + 1000r, + 1000, + 1000, + 100%, +2000, + 2000y, + 2000y, + 2000», + 2000y, st. 1609, — 50x, = 6000 y, = 50 160y, ~ 50x, = 7000 0.95y, +.) = Ys Lody, ~ 50x, = 8000 0.95 xy 160y, — 50x, = 9500 0.95y, +, 160), — 50x, = 11,000 0.95y, +, = 3.4.5) “The optimal solution is oy = 8.45; 4, = HAS; xy = 9.525 x5 = 05 yy = 50: y = 47.5: ys = 53.58; y, = 62.34: and yy = 68.75. Tn reality, the y,’s must be integers, so our solution is difficult to interpret, The problem ‘with our formulation isthe fact that assuming that exactly 5% of the employees quit each month can cause the number of employees to change from an integer during one month to a fraction during the next month. We might want co assume that the number of employees quitting each month isthe integer closest to 5% of the total work force, but then we do not hhave a linear programming problem! | Problems : if a computer is rented for three months atthe beginning of ‘$300, not $450, should May then a rental fee of 3(450) Group A Voit problem! 38, what would be the optimal solution to CSL's 2. Aminsurance company believes that i will require the following mimbers of personal computers during the next six months: Fanuary, 9; February, 5; March, 7: Apri 9: May, Ti: June, 5. Computers can be rented for & petiod of one, ‘ovo, or three months at the following unit rates: one-month rate, $200; two-month rate, $850: three-month rate, $450. Formulate an LP that can be used to minimize the cost of renting the required computers. You may assume that if 3 machine is rented for a period of time extending beyond Sune. the cost ofthe rental should be prorated. For example be assessed in the objective function 3. The IRS has determined that during exch of the next twelve months they will need the number of supercomputers siven in Table 39. To met these requirements the IRS rents Supercomputers fora period of one, two, or three months. It eosts $100 to rents supercomputer for one month, $180 fortwo months, and $250 For three months. At the beginning fof mont I the IRS has no supercomputers. Determine the ‘ental plan that meets the next twelve months” requirements at hhinimam cost Nore: You may assume that factional rentals are okay. Thus i your soTution says torent 140.6 computers for one month we ean round this up or dawn to 141 oF 140) without having much effect on the total eos.AgLE SS oth Compete Reqemeats Summay 111 2 You observe your inital stock of wheat bb You can sell any amount of wheat up to your initial stock at the current month's selling price 00 € Yovcanbuy tthe curest mont’ bying rice) : hed toch ato ou wan sje oe : oo ion 300, ‘Your goal is to Formulate an LP that can be used to determine 5 1200, ‘how to maximize the profit earned over the next ten months, : ‘oo om a oo TABLE 40 ; ‘m0 ° on tsi Pte ' oo = ae - 1 3s > OS 2 oye i St 3 Group B 3 os st 4 You oun a wheat warchouse with a capacity of 20000 6 8 3 ton ettebpaming oben ou ave 600 buss s 8 aoe eee eeesemhebam aaa SD te onic gen nt 0. 5 Ss Fee ee imnacadaonhisssfollw: 82S Summary Lineor Programming Definitions A linear programming problem (LP) consists of three parts 1A Tinear function (the objective function) of decision variables (say. x) that is to be maximized or minimized, 2 jeach of which must be a linear equality or linear inequality) that restrict the valu that may be assumed by the decision variables. 3. The sign restrict must be nonnegative—x, * 0: or (2) variabl 5, which specify for each decision variable «, either (1) variable i, may be positive, zero, or negative—x onis the vatiable’s abjeetive function coefficient. The The coefficient ofa variable inthe objective Funct coefficient. The coetticient of a variable in « constraint is a technolog right-hand side of each consteaint is called a right-hand side (rhs). A point is simply a specification of the values of each decision variable. The feasible region of an LP consists of all points satisfying the LP's constraints and sign restrictions. Any point in the feasible region that has the largest <-value of all points in the feasible region (for a max problem) is an optimal solution to the LP. An LP may have no optimel solution, one optimal solution, or an infinite number of optimal solutions A constraint in an LP is binding if the left-hand side and the right-hand side are equal when the values of the variables in the optimal solution are substituted into the constraint112 Gofer3—tovon an Pago Grophical Solution of Linear Programming Problems ‘The feasible region for any LP is a convex set. If an LP has an optimal solution, there isan ‘extreme (or comer) point ofthe feasible region that is an optimal solution to the LP. We may araphically solve an LP (max problem) with two decision variables as Follows: Step 1 Graph the feasible region, Step 2 Draw an isoproft line Step 3 Move parallel to the isoprofit line in the direction of increasing =. The last point in the feasible region that contacts an isoproft line is an optimal solution to the LP. LP Solutions: Four Cases When an LP is solved, one of the Follows four cases will occur: Case 1 The LP has a unique solution. Case 2 The LP has more than one (actually an infinite number of) optimal solutions. This is the ease of alternative optimal solutions. Graphically, we recognize this ease when the isoprofit Hine last hits an entire line segment before leaving the feasible region. Case 3 The LP is infeasible (it has no feasible solution). This means that the Feasible region contains no points, Case 4 ‘The LP is unbounded. This means (in a max problem) that there are points in the feasible region with arbitrarily large z-values, Graphically, we recognize this case by the fact that when we move parallel to an isoprofit line in the direction of increasing 2. we never lose contact with the LP's feasible region, Formulating LPs ‘The most important step in formulating most LPs is to determine the decision variables conreetly {In any constraint, the ferms must have the same units. For example, one term cannot hhave the units “pounds of raw material” while another term has the units “ounces of raw mater Review Problems | time and wses # egg, Eight hours of aking time and 30 e285 Group A are available. Formulate an LP to maximize nme Hoes’ revere. Then graphically solve the LP. (4 fractional number 1 Bloomington Breweries produces ter und ale, Beer Neate TMD sels for$5 peru ad ate sls forS2perbarel Produce ST SSHES BOG) ing a harel of beer requires 3 Ibof comand Thot hops, 3. T now have $100. The following investments are ail Producing a barrel of ale requires 2 1b of com and ET able during the next three years: hops. Sixty pounds of eorn and 25 Ib of hops are avaiable, Formulate anLP thatcanbe sed tomaximize revenue, Solve Investment A Every dollar invested now yells S010 a the LP graphically year from now and $1.30 three years from now 2. Farmer Jones hakes win types of cake (chocolate and Investment B_ Every dollar invested ow yields $0.20 a ‘anil to supplement his income. Each ebocolute cake can Yea from now and ST, 10 two yeas trom now be sold for Si, and each vanilla cake can be soll for 508. Investment C Every dole invested year from now Each chocolate cake requires 20 minutes ot baking time andl yields $1 3D thre yeas from now oss eggs. Each vail cake requires 40 mingtes af akingDuring ssh yo. uninvesed esh ean be placed in money Patter fos hich eld 6 interest per year At mom 980 May ne pled in each of ivesmens A Band C. Formulate JEL Pumnsimize my cashon hand thee years ftom now 4 Sanco processes ol ito aviation fuet and heating ol teoxts S41 purchase cach 1000 barrels of oil, which is then cise and yields 500 barrels of aviation fuel and 500 hurrels of boating oil. Output from the distillation may be sold dicsty or processed in the catalytic cracker. I sold after Aistllaion without further processing, aviation fue sells for 5001 por 1000 barrels, and heating oil Sells for $40 per 1000 barrels. I1akes hou to process 1000 barrels of aviation fuel inthe caalytic cracker, and these 1000 barrels can be sold for S130, Intakes 4S mints to process 1000 barrels of heating cin the cracker, and these 1000 barels ean be sal for S90. Each day. at most 20,000 hhareelsof oil can be purchased, and 8 hours of cracker time are available, Formulate an LP tormasimize Sunco’s pois, 5 Finca has che following investments avaible: Investment A For each dollar invested at time 0, we te «vive $0.10 al time 1 and $1.30 at time 2. (Time (= now: time I = one year from now: and $0 0n.) Investment B_ For each dollar invested at time 1, we ne- vive S100 at time 2 Investment © For each dollar ceive S20 atime 3. ested at Atany tne, leftover eash may be invested in T-bill, whieh py 10% pet year Attime D, we have $100. At most $50 can be invested in each of investments A,B, and C, Formulate an LP that can be used 10 maximize Finco’s cash on hand at time 3, 6 All stcet manufactured by Steelco must meet the fol lowing requirements: 3.2-3.34% carbon: 1.8-2.5% silicon: (19-12% nickels tensile strength of ar east 45.000 pounds Per square inch (ps). Steeleo manufactures steel by comnbin 'ngtwoalloys. The cost and properties of eacally are given in Table 41, Assume thatthe tensile strength of a mixture of ‘he wo alfoys eam be determined by averaging that ofthe al- loys mat are mixed together. For example, a one-ton mixture that is 40% alloy I and 60% alloy 2 has a tensile strength f 0.4142,000) + 0.6(50.000). Use linear programming 1 letermine how to minimize the cast of producing a ton of sgt ‘sy Aley2 Costperton $190, S200 Percent silicon 2% 25% Percent nickel 1% 13% ent carbon 34h 45 cusile strength 42,000 pst 54.000 psi Revew Reblems 118 7 _Steeleo manufactures two types of steel at three ferent steel mills. During a given month, each steel mill has 200 houts of blast furnace time available, Because of differences in the fumaces at each mill, the time and east to produce «ton of ste! differs for each mill. The time and ost for each mill are showa in Table 42. Each month, Steeleo must ‘manufacture a Teast S00 tons of steel | and 606 tons of ste! 2. Formulate an LP to minimize the cost of manufscturing the desired sel ‘Walnut Orchard has ewo farms that grow wheat and ‘com. Because of uiffering sail conditions. there are dilfer- {ences inthe yields and costs of growing erops on the 10 farms. The yields and costs are shown in Table 43. Each farm has 100 acres available for cultivation: 11,000 bushels ‘of wheat and 7000 bushels of corn must be grown. Determine «planting plan that will minimize the cost of meeting these ‘demands, How could an extension ofthis model be used to allocate erop production efiienty throughout a nation? 9 Candy Kane Cosmetics (CKC) produces Leslie Per: Fume. which requires chemicals and Libor. Two production processes are available: Process 1 transforms 1 unit of bor and 2 units of chemicals into 3 o2 of perfume, Process 2 transforms 2 units of Isbor and 3 units of ehemicals into 5 07 of perfume. It costs CKC $3 t0 purchase a unit of le ior and $2 to purchase a unit of chemicals, Each year, up 0 20,000 units of labor and 35,000 units of chemicals can bbe purchased. In the absence of advertising, CKC believes it «an sell 1000 02 of perfume. To stinwilate demand for Leslie, CKC can hire the lovely model Jenny Nelson, Jenny’ is paid $t00mour. Each hour Jenny seorks for the company iy es- timated to inerease the demand for Leslie Perfume by 200 ‘oz, Each ounce of Leslie Perfume sells for $5. Use linear programming to determine how CKC can maximize pris, TABLE 42 Pode onal Sic Steal? Tie Cc ) Mill “$10 200 SIL 22 Mill2 $12 243918 Mills $1428 S10 30 TABLE 43 Form | Fam? Comm yieldiucre SOO bushels 650 bushels Costiere ofeom $100 3120 Wheat yieldcre 400 bushels 350 bushels Cosvere of wheat $90) sso Based on Healy and Esher (19H114 Cape 3 tlc in Paanicg 10 Careo has « $150,000 advertising budget. To increase automobile sales, he frm is considering advertising in news- papers and on television, The more Carco uses a particular medium, the less effective is each additional ad, Table 44 shows the number of new customers reached by each ad. Each nevispaper ad costs $1000, and each television al co 11000. At most, 80 newspaper ads and 15 television ads can be placed. How can Careo maximize the number of new teustomers created by advertising? 11 Sunco Oil has refineries in Los Angeles and Chicago. ‘The Los Angeles refinery can refine up to 2 million barrels of oil per year and the Chicago retinery up to 3 million. Once refined, oi i shipped to two distribution points: Houston and New York City, Sunco estimates that each distribution point can sell up to 5 million bartels per year. Because of dif ferences in shipping and refining costs, the profit eamed (in so sm 180 The local court has dectded that each of the town's two Jy schools (Cooley High and Walt Whitman High) must h have approximately the same percentage of minority students [within 5%) as the entire town. The distances (in miles) hetween the schoo! districts and the high schools are given, in Table 48. Each bigh school must have an enrollment of 3iN0-500 students. Use linear programming to determine an sssignment of sidents £9 schools that minimizes the total lstance students must iravel fo school 19° Brady Corporation produces cabinets, Each week, they require 90.000 cu It oF processed lumber, They m: ‘oblain lumber in to ways, Fest, they may purchase lumber From an outside supplier and shen dry it at their kiln. See~ ‘ond: they may chop down logs on their land, cut them imo Iumer at their semi, and finally dry the lumber at their Ailn, Brady can purchase grade | or grade 2 lumber. Grade lumber costs $3 per cu ft and when dried yields 0.7 ev Trof useful lumber. Grade 2 umber costs 57 per cubic Foot and when dried yields 0.9 eu ft of usetul lambert costs the company $30 chop down a log. After being cut and dried, ‘log yiekls 0.8 cu ft of umber, Brady incurs costs of $4 per fu TC of lumber dried. It costs $2.50 per eu fof logs sent ‘hyouzh the sawmill. Each week, the sawmill ean process up 1 35.000 eu fof lumber. Each week, up 40,000 ew fof ade I lumber and up 10 60,000 eu 1 of grade 2 lumber teu be purchased. Each week, 40 hours of time are available for drying lumber, The time it takes 10 dry Lew fk of grade rade 2 lumber, o logs is a8 follows: grade 1 ide 20.8 second; log-—I.3 seconds, Formulate an LP to help Brady minimize the weekly cost off the demand For processed lumber The Canlian Parks Commission controls vo tacts DF and, Traet 1 consists of 300 acres and tract 2, 100 acres, ch acre of tact 1 ean be use! for sprace trees or hunting TAELE aa Coley Wa Wiiman Dist High High ao Chet Ager 1970) Povew Patlons 115 ‘or both, Each are of tract 2 can be used for spruce tes ‘or camping, or both. ‘The capital tin hundreds of dollars) and labor (in man-days) required to maintain one aeve of ‘each trict, and the profit (in thousands of dollars) per acre foreach possible use of land are given in Table 49. Capital ‘$150,000 and 200 man-ays of labor are available. How should the fand be allocated to vatiods uses to maximize rai reeeved from the two tacts? 2V6 Chandler Enterprises produces two competing prod Uuets: A and B. The company wants to sell these preduers to ‘wo groups of customers: group [and gvoup 2. The value each customer places on a unit of A and B is as shown in Table 0. Each customer will buy either product or product, Bi. but not both. A customer is willing to boy prodet A if she believes that ‘Value of product A ~ price of product A ‘Value of praiuct B ~ price of product B and Value of product A ~ price of product A > 0 AA eustomer is willing to buy product B if she heieves that Value of product B — price of product B 2 value of product A ~ pre of produet A and Value of product B ~ price of product B = 0 Group | has 1000 members and group 2 has 1500 members, ‘Chandler wants o set prices foreach product that ensure _eroup | members purchase product‘ an group 2 members TABLE S® Catal taker Profit Tract ISpruce 32 Tract Homing = 30.2 Od Tract | Both eee OJ Tract 2Spruce 1.05.06. Tract 2Camping 30 S00 Teet2Boh 10 LOL LT TABLE 50 Groep | Group 2 stoner Gastoner ValueotAto SIO SD Valueof Bro $8 SS tse Dusan and Kali IONS,116 Clap 3—inoduton ire Regain purchase product B, Formulate an LP that will help Chandler 22) Alden Enterprises produces two proguets. Each prod= Ut can be produced on one of two machines. The Fength Of time needed to preduce each predict (in hours). on each machine is a shown in Table 51. Each month, 500 hours of time are available on each machine. Each month, customers are willing to buy up the quantities ofeach prodict atthe prices given in Table 2, The company’s oul isto maximize the revenue obtained from selling units Guring the next 10 ‘months, Formulate an LP to help meet this goa 28. Kisiakis Electronics produces three products. Each product must be processed on each of thee types of ma- chines, When @ machine isin use, it must be manned by a ‘worker The time (in hours) required 1 process each product fon each machine and the profi associated with each prodaet fre shown in Table $3, At present, five type E machines, three {ype 2 machines, and four type 3 machines are available. The ‘company fas ten workers available and must determine how ‘many workersto assign to each machine. The plants open 40 hours per week, and each worker works 35 hours per week, Formate an LP tha will enable Kiriakis to assign workers to machines ina way that maximizes weekly profits. (Nove AA worker need not spend the entire work week manning a single machine.) 4 Gotham City Hospital serves eases from four diagnos tie related groups (DRGs). The profit contribution, diagnostic TABLE SI Macie | Machine Product | 4 3 Product? 7 TABLES? Demands Prices Mth Hanh? Mono? Product! 100190 $55 SI2 Product? 140130 $65. $32 TABLE 53 Product 1 Prague! radu 3 Machine 1 2 3 4 Machine? 3 5 6 Machine 34 7 9 Prost sb sso Based on Hin, St rd sold (1978 service use (in hours), be/-day use (in days), nursing care use Cin hours} and drug use (in dollars) are given in Table S4. AL present the hospital has available each week 570 hours of di fagnoste services, 1000 bed-days, 50,000 sursing hours, and $550,000 worth of drugs. Ta meet the community's minimum health care demands at least 1 DRGI, 15 DRG2, 40 DRG3. and 160 DRG eases must be handled each week. Use LP tetermine the hospital's optimal mix of DRGs.” 25 Oliver Winery produces four award-winning wines in Bloomington, Tiana, The profit eontabuion, labor hours, andtank usage Gn hours) pr gallon foreach type of wine are iivenin Table 5, By law at mos 100,000 gallons of wine can te praced each year. A maximum of 12,000 labor hours and 32,000 tek hours are available annul, Each gallon of swine Ispende an average of yearn inventory; wine 2 an tnerage of | year wine 3, an average of 2 yeas, wine 4 an snerage of 3.333 yeas. The winery's warehouse can handle Sh average inventory evel of 50.000 gallons. Determine hws much ofeach te Of wine should Be produced annualy (0 maximize Olver Winery's profit 26 Graphically solve the following LP. « nee n+ mee 2s, +102, = 20 27 Grummins Engine produces diesel trucks. New gov: femment emission standards have dictated thatthe average pollution emissions of all trucks produced in the next three Yemscannotexceed 10 grams per ruck, Grammins produces, two types of trucks, Each type I tuck sells for $20,000, TABLE SS Diegrstic Profit — Services Bededay Nursing Use Droge DRG! 20007 5 30-800 DRG? 1500 4 2 1300 DRG} 302 1 ee iso) DRG4 300 o 1 50 TABLE SS Profit obor Tak Wine! $6 2he Shr Wine? $12 3he Shr Wine 3 $20 3he Thr Wines $300 Shr Shrcos $1500 0 manufactre and eis 13 grams of pollo are eye ck seller SLO, an cos S100 ta fate, an emis 3 rans of pon. Proton toy nits al tuk production daring each ett a sap ek: Garmin knows th the exon Fes achtek ype thatean be sol during each ofthe next (Sie yeas eon Table Gs arans 300tpe tucks can esol ding year Dendy bet rom previous production orth curet craton costs $2000 (0 hold Truck fay type) 3 ny fo oe yea Formulate an LP top Grins ie zs hel ro during te ex hee ye, 28 Describe al optimal solutions to the following LP: ming =4e, bx; 4, $x2 12 29 Juiceco manufactures two products: premium orange juice and regular orange juice. Both products are made by tombining two types of oranges: grade 6 and grade 3. The fringes in premium juice must have an average grade of ft least 5, those in regular jue, atleast 4. During each of the next to months Iuiceco can sell up to 1000 gallons ‘of premivin juice and up to 2000 gallons of repular juice: Premium jue sells for $1.00 per gallon, while regular juice sells for 0 per gallon. Atthe beginning of month I Juiceco. hs 3000 gallons of grade 6 oranges smd 2000 gallons of stale 3 oranges, At the beginning of month 2 Juiceco may. Purchase additional grade 3 oranges Yor 40 per gallon and ikltional grade 6 oranges for 60¢ per gallon. Juice spoils atthe end of the month, so € makes no sense to make extra jie during moath [in the hopes of using to mect month 2 demand. Oranges left at che end of month [ may be used 10 Prohice juice for month 2. AC the end of month | a holding tof 5¢ is assessed against each gallon of leftover grade } oranges, and 10€ against each gallon of letover In addition to the cost f the oranges, costs LDe 10 ich allo af wegular or premium) juice. Formulate rade an LP that could be used to maximize the profit revenues — esis) eamed by Juiceco during the next wo mouths TABLE $6 Mona Dement fr ots ese Type type? i100) 200) > 20100 3 30150. Pesow Roblns 117 30. Graphically solve the following linear programmin problem: 31 Graphically find all solutions to the following LP: 32 Fach day Eastinghouse produces capacitors during thre shifts: 8.8.4 PM. 4 HM. -midnight, midnight-8 a “The hourly sary paid to the employees on eae shift, the price charged for each capacitor made during cach shift and the number of defects in each capacitor produced duting a isiven shift are shown in Table 57. Each of the company’s 2: ‘workers can be assigned 10 one of the three shifts. A worker produces 10 capacitors during a shift, but due to machinery Timitations. 10 mone than ten workers can be assigned to any shift. Each day at most 250 capacitors can be sok, and the Average number of defects per capacitor for the day’s pro “duction cannot exceed three. Formulate an LP to maximize astinghouse's daily profit (sles revenue ~ labor cost. 33. Graphically find all solutions to the following LP: axe dr, + st Bx, #20 34 During the next three months Airco must meet (on time) the following demands for air conditioners: month 1. 300: month 2. 44); month 3, 500. Air conditioners can be produced in either New York or Los Angeles. It takes 1.5 hours of skilled labor t produce an air conditioner in Los. Angeles nd 2 hours in New York. tt costs $400 to produce an air conditioner in Los Angeles, nid $350 in New York During each month each ety has 420 hours of skied labor svailable,Itcosts S100 hold an air conditioner in inventory fora month. At the beginning of month | Aieco has 200 air TABLES? Defects stat Healy Slry (per capaien) Price SaM—4 PM si +8 dpx-Midnight —— SI6 3 sn Midnight-$ a.VIB Clope3—tucon ier Paying cconultioners instock. Formulate an LP whose solution will tell Aico how to minimize he costof meeting air conditioner demands for the next three months, 35. Formulate the flowing os alinear programing probs Jem: A greenhouse operator plans to bid forthe jobof provid ing Mowers for city parks. He will use tulips, daffodils, and lowering shrubs in thece types of layouts. A type 1 layout ‘ses 3 tulips, 20 daffodils, and 4 lowering shrubs. type: 2 layout uses 1D tulips, 40 datos, and 3 flowering shrubs type 3 layout uses 20 tlips, SO datos, and 2 flowering Stubs, The net profits $50 for each type | Hayout, $30 for each type 2 layout, and $60 for each type 3 layout, He has 1000 tulips, 800 daffodils, and 100 flowering shrubs. How many layouts ofeach type shoukd he used to yield maxim profit? 36 Explain how your formulation in problem 35 changes: if both ofthe following conditions are added: ©The number of type | layouts eannot exceed the ‘numberof type 2 Fayouts b There must be a least five layouts of ea ch ype 37 Graphically solve the following LP problem: mins = 68, +2, st 3a £28,212 or, + Ae Group B 38 Gotham City National Bank is open From 9.x. co 5 Pat. From past experience, that it needs the number of tellers shown in Table 58, The thank hires to types of tellers. Full-time tellers work 9-5 five days a week, except for I hour off fr lunch, (The hank determines when a fulltime employee takes lunch hour, but fch teller must go hetween noon and | PM, of between pat and 2 pA) Full-time employees are paid including feinge benefits) $8vhour (his includes payment for lunch hour). The bank may also hire part-time tellers, Each part ‘ime teller must work exactly 3 consecutive hours each day TABLE S8 Tine Tales Pesnd Reged om 4 wn 3 H-Noon 4 Noot-l 6 12 5 a4 8 A paretime teller is paid $S/hour (and receives no tinge benefits). To maintain adequate quality of service, the hank has decided that at most five part-time tellers can be hired Formulate an LP to meet the teller eequrements at minimum cost, Solve the LP on a computer. Experiment with the LP answer fo determine an employment policy that comes close te minimizing labor cost, 39° The Gotham City Police Department employs 30 po- lice officers. ach officer works 5 days per week, The erime rate Ructuates with the day of the week, so the number of police officers required each day depends on which day of the week itis: Saturday, 28; Sunday. 18; Monday, 18: Tues: slay, 24; Wednesday, 25: Thursday, [6: Friday, 21, The police ‘department wants ta schedule police officers to minimize the number whose day’ off are not consecutive. Formulate an LP that will accomplish this goal, (Hint: Have a constraint foe each day uf the week that ensures thatthe proper number of officers are nor working on the given day-) 40° Alexis Comby makes her living buying and selling comm. On Januay 1. sbe has 0 tons ofcum ad 1000. On the frst day of each month Alexis can buy com atte following prices per ton: January, $300; February, $380: Marc, S400: Apri. $800. On the last day of each month Alexis can sll comatthefllowing prices per to unuary, $250: February, S400: March, 8350: April $550. Alexis stores her comin warehouse that ean hold at sos 100 tons of corm. She mst be able o pay eas forall cor atthe ine of purchase. Use linear programming vo determine how Alexis ean maximize her eash on hap at the end of Ari 41° Arne beginning of month 1, Finco has $400 in eas. At he begining of months 1,2, 3, and 4, Finco receives eran revenues after which it pas bil (se Table $9). Any money elovermay be invested forone month the interest fate oF 0.1% per month: for wo months a 05% per month for three months 31% per month: oe forfour months a 2% per month Use linear programming to determine an iyest- ment sateay that maximizes eash ow hand a the begining otronth 5 42 City | produces 500 tons of waste per das and city 2 produces 400 tons of waste per day. Waste mst be ineinr ned a incinerator 1 o¢ 2, and each incinerator can provess Upto 500 tons of waste per day, The costo incinerate waste TABLE 59 Reverses fil Month 1 $400 $600 Month 2 $800. $500 Month 3 $300 $500 Month $300 5250 Aare oa Rhein (1973, Based on Charnes nd Coop 19551 Basel on Robihek, Teh, an Jones (1958),js S4otion at incinerator 1 and $30tton at 2 Incineration re duces each ton of waste 100.2 tons of debris which most be ‘Tomped st one of two landfills, Each Tandfil can receive at thon! 208 tons of debris per day. Ie costs $3 per mile to trans- por ton of material either debris or waste). Distances tn fies) between locations ae shown in Table 60, Formulate Sir LP that can be used to minimize the tal cust of disposing ‘fhe waste of both cities. 48° Silicon Valley Corporation Silvco) manufactures tran sintrs. A important aypeet ofthe manwfacture of transistors ie ihe melting ofthe element germanium (a major compo- hnent of a tasistor in Furnace. Unfortunately, the melting prowess yiels germanivm of highly variable quality. Tere are two methods that can be used to melt ger- anim method | costs $50 per transistor. and method 2 fonts S7D per transstr. The qualities of germanium ob- tained by methods | and 2 are shown in Table 61. Silveo. fan retire melted germanium in an attempt to improve its tquity 1 costs $2510 retire the melted germanium for one transistor, The results of the refiring process are shown in Tale 62, Silveo has sufficient fumace capacity to melt oF refite genta for at most 20.440 transistors per month Silveo's monthly demands ate for 1000 grade 4 transistors. 2100 grade 3 teansistors, 3000 grade 2 ransistors, 3000 | transistors, Use linear programming to minimize the cost ‘of producing the needed transistors, TABLE 60 Ineratr 1 Incnertor 2 Iocinerawor 5 8 locineraior? 6 TABLE OF Pact Vile by Grads of aed Ss __ Germann tnt ated? Defective 300 Gulet 300 Gade? 2S Gude’ 15 Gules «515 i Review Potiers: 119 TABLE 62 Raticed Percent Yielded by Refirn rode © Peet led by Refrng_ Sermon lhe Gok Gi? G3 Deana esol samo mee toneen Gale! 5 Gaie? 15 (crete eee on ee ee 0) Gates 05D 44° A paper recycling plat processes box boat issue paper, messin and bok paper into pap that can be used to produce tree arads of reeled paper (grades 1, 2 and 3) The prices pec ton and the pulp contents ofthe four ips ive shown in Table 63. ‘Two methods, de-aking snd asphalt dispersion ean be used to process the four inputs ito pulp Ie costs $20 to de-nk a ton of any inp. The proces of de inking removes 10 percent ofthe inputs pulp leaving 90% ‘ofthe criginal pull. I costs $15 to apply asphalt dispersion toaton of material. The asphalt dispersion proses removes 20% ofthe inputs pulp. At sos 3000 tons of input can be tun throug the asphalt dispersion processor the de-inkin proces. Grade 1 paper ean only be predoced with newsprint ‘or book paper pip: srade 2 paper ony sith hook paper thse paper or box oar pul and grade 3 paper. ont with newsprint, issue paper of box board pulp. Ta meet itscurent Asya, he company needs SOD tons of pap for gra | paper. 500 tons of pulp for grade 2 pape. and 60D tons of pulp forgrade3 paper. Formulate an LP to minimize the cox. Ssrmoeting th demands Tor pulp. 45. Turkeyeo produces nwo types of turkey cutlets for sale to fas food restaurants. Bach type of eutlet consists of white ‘neat and dark meat. Cate | sells for Sb and must consist ff at Jeast 70% white meat, Cutlt 2 sels For S4/Ib and mus ‘consist of atleast 60% white meat. At most 50 Ib of cutle [and 30 bof eutlet 2 ean be sold. The tw types of turkey ‘esd to manufacture the cutlets are purchased from the Gob bleGobble Turkey Farm, Each type I turkey costs S10 and yields 5 Thof white meat and 216 of dark meat. Each type 2 turkey costs8 and yieks 3 Ib of white meat and 3 Th of ark neat, Formulate an LP to maximize Turkeyeo's pro. TABLE 63 ost lp Cot Box board SSS Tissue paper $6 20% Newsprint $8 30% Book paper SIO. 40%120 Cher 46 Priceler manufactures sedans and wagons. The number of vehicles that can be sold each of the next three months are listed in Table 64. Each sedan sells for $8000, and each wagon sell for $9000. It costs $6000 to produce a sedan and. $7500 to produce a wagon. To hold a vehicle in inventory for one month costs $150 per sedan and $200 per wagon, During each month, at most 1500 vehicles ean be produced Proiction line restrietions dictate that during month I, at Teast two thirds of all cars produced must be sedans. At the beginning of month {, 200 sedans and 100 wagons are available. Formulate an LP that can be used to maximize Priceler’s profit during the next three months 47 The production-line employees at Grummins Engine ‘work four days a week, ten hours a day. Each day of the ‘week, (atleast the following numbers of line employees are needed: Monday-Friday, 7 employees; Saturday and Sunday, employees. Grummins has IT produetionsline employees, Formulate an LP that can be used to maximize the number of| ‘consecutive days off receivedby the employees. Forexample, 4 worker who gels Sunday, Monday, and Wednesday off receives wo consecutive days off 48 Bank 24 iy open 24 hours per day. Tellers work two consecutive 6-hour shifts and are paid S10 per hour. The pos- sible shfls are as follows: midnight-6 A.M, 6 A.M.-n00n, noon-6 Ps. 6 PM.-midnight. During each shift, the follow ing numbers of customers enter the bank: midnight-6 A.M 100; 6 s.M-noon, 200; nooA-6 PAL. 300; 6 PAtmidnight 200. Each teller can serve up to 50 customers per shift. To ‘model a cost for customer impatience, we assume that any ustoiner who is presenta the end ofa shift “costs” the bank 55. We assume that by midnight of each day, al customers must be served, so each day's midnight-6 A.M. shift begins with 0 customers in the bank. Formulate an LP that can be sed to minimize the sum of the bank’ labor and eustomer impatience costs, 49° Transeast Airlines flies planes on the Following route: L.AHouston-N.¥-Miami-LA. The length (in miles) of cach segment of this trip is. as follows: L.A.-Houston, 1500 miles: Houston-N.Y., 1700 miles: N.Y.=Miami, 1300 miles Miami-L.A.. 2700 miles. Ateach stop, the plane may pur hase up © 10.000 gallons of fuel. The price of fuel at each city is as follows: LA., 8Re; Houston, 15¢5 N.Y, S105: Miami, 95¢. The plane's fuel tank can hold at most 12,000 ons. To allow for che possibility of ereling aver a landing site, we require that the ending fuel level for each leg of the TABLE 68 Sedons Wagons Month | 1100 600 Monih2 1800 700 Month 31200500 Based oa Darel an Lain (1977), Into tier Pragoniog fight be at least 600 gallons. The numberof gallons used per mle on each leg of the light is 1+ (average fue! level on leg of Hight/2000) To simplify matters, assume thatthe average Fuel level on any Teg ofthe flight is (Fue! level at start of leg) + (fuel level at end of leg) z Formulate an LP that can be used t0 minimize the fuel cost incurred in completing the schedule, 50° To process income tax forms. the IRS first sends each form through the data preparation (DP) department, where information is coded for computer eotry. Then the form is sent to data entry (DE), where it isentered into the compute, Daring the next three weeks, the Following number of for ill ative: week 1, 40,004; week 2, 30,000; week 5, 60.000. The IRS meets the crunch by hiring employees wha work 40 hours per week and are paid $200 per week. Data preparation of a form requires 15 minutes, and data entry of a form requires 10 minutes. Fach week, an employee is assigned to cither data entry or data preparation. The IRS must complete processing of al forms by the end of week S and wants (© minimize the cost of accomplishing this goal, Formulate an LLP that will determine how many workers should be working each week and how the workers should be assigned aver the next five weeks, SL In the electrical circuit of Figure 9, J, = current (in amperes) flowing through resistor f, V, = Volage drop (in vols) across resistor 7, and R, = fesistance (im ohms) of resistor. Kirchof’s Voltage ad Current Laws imply that V, = Vem Vy and 1, + fy f= fy The power dissipated hy the current flowing through resistor tis £2, Ohm's Law implies that V, = 1,R,. The two parts of this problem should be solved independently @ Suppose you are told that /, = 4, fy = 6, fy =8, a 8 are required. Also, the voltage drop across each fesistor must he between 2 and [0 volts. Choose the £,'s to minimize the total dissipated power. Formulate an LP whoxe solution wil solve your problem, b Suppose you are told that V, =6, = 6, ¥, 6. and V, =4 are required. Also: the curfent flowing through eich resistor must be between 2 and 6 amperes FiguRED wv — Roh Re— Chose the R's to minimize the total dissipated power Formulate an LP whose solution will salve your prob: Jem, Formulate an LP whose solution will solve your t “ problem. (Hine Let 1.2.3.4) he your decision R variables 52. Themayor of Llawiew is trying to determine the num: hero jnlzes needed to handle the judicial caseload, During ech soni of the year i is estimated thatthe number of jc hours needed is given in Table 65, 4 Each judge works all 12 months, and can handle up to [20 hours per month of easework. To avon creating & heklog, all cases must be handled by the end of De ‘ember. Formulate an LP whose solution will determine Pr beach judge received 1 month f vacation each year hhow woul your answer change? Group ¢ 58° EJ. Korvair Department Store has $1040 in available cash, At the beginning of each of the next six months, EJ will eceive revenues and pay bills as shown in Table 66, TABLE 65 Howes January 4001 February 300 March 200 April 0 May 800 lune 300 Daly 200 Ausust 400) September 300) Oxtober 200 November 100 December 300 TABLE 66 $1000 ss000 $2000 $3000 September $2000 $6400 Octo 4000 $2000 November $7000 $2000, December $8000 S100) Basel on Robichek Teer, al Jones (1965 Review Palins 121 Iv clear that EJ. will have a shor-term cash flow problem ‘nti the store receives revenues from the Christmas shopping season. To solve this problem. EJ. mist borrow money AL the begining of July. EJ. may take outa six-month Joan. Any money borrowed for a six-month peti must he pid back at the end of December along with 9% interest, (early payback does not rede the interest cost of the loan), EJ. may also meet cash needs through month-to-month bor. rowing. Any money borrowed fora one-month period incurs an interest cost of 4% per month, Use linear progr ‘determine how E.J. can minimize the cost of payi 54° OIE Oil produces thee product: heating oi and jet fuel. The average octane levels must be a for heating ol, 8.5 far gas, and 7.0 for jet fuel, To produce theve products Og purchases two types of oil: erude | (at $312 per barel) and crude 2 (at $10 per barrel. Each day. at ‘most 10,008 bartels of each type of oil can be purchased, fore crude can be used to produce products forsale, it rust be distilled, Each day. at most 15.000 barrels oF ol ca be distilled Ievsts 10¢ to distill a barrel of oil. The rest ‘of distillation is 2s follows: (1) Bach barrel of erude | yields (06 barrel of naphtha, 0.3 barrel of distilled 1, and 0.1 barrel of distilled 2, (2) Each barre of crude 2 yields 04 barel of aaphiha, 0.2 barrel of distilled t, and 0.4 barrel of distilled 2. Disiled naphitia can be used only to produce gasoline or Jet fuel. Distled oil can be used to produce heating oil or ‘ean be sent dhrough the catalytic eracker fata cost of 158 per barel). Each day, at most 000 burelsof distilled oi ean bre sent through the cracker. Each barrel of distilled 1 set though the eracker yields 0.8 barrel of cracked 1 and 0.2 barrel of eracked 2. Each barrel of distilled 2 sent through the cracker yields 0.7 barrel of cracked | and 0.3 barrel of cracked 2. Cracked oil ean be wsed to produce gasoline and jet fuel but not to produce heating oi The octane level ofeach gype of ol is as follows: naphtha, 8: isilled 1,4: distilled 2, §; cracked 1,9: cracked 2.6. All heating oil produced can be sold at $14 per barrel all gasoline prixlced. SI8 per barrel and all jet fel pro ‘duced, $16 per barrel. Marketing considerations dictate that at least 3000 barrels of each product must be produced daily. Formulate an LP to maximize Ole daly profit 55. Donald Rump is the international funds manager for ‘Countribank (he needs the money to support Marva), Each day Donald's job is to determine hos the bank's current holdings of dollar, ponds, marks, and yen should be ad justed to meet the day’s currency needs, Today the exchange rates hetween the various currencies are given in Table 67 For example, one doar can he converted t0 58928 pounds, ‘or one pound ean be converted to 1.697 dollars A the beginning of he day Countribank has the curen holdings given in Table 68, Atthe end ofthe day, Counteibunk must have at leas amounts oF each currency given in Table 69. Based on Garvin ot 095