RITCHELLE G. REYES MR.

MAXIMO MULDONG
2.2 BSA-CY2 MANAGEMENT SCIENCE WED. 5-7 PM

FINALS 1
CASE 2

Klein Chemicals, Inc., produces a special oil-base material that is currently

inshort supply. Four of Klein’s customers have already placed orders that
together exceed the combined capacity of Klein’s two plants. Klein’s
management faces the problem of deciding how many units it should supply
to each customer. Because the four customers are in different industries,
different prices can be charged because of various industry pricing structures.
However, slightly different production costs at the two plants and varying
transportation costs between the plants and customers make a “sell to the
highest bidder” strategy unacceptable. After considering price, production
costs, and the transportation costs, Klein established the following profit per
unit for each plant-customer alternative.

Plant D1 D2 D3 D4
Clifton Springs $32 $34 $32 $40
Danville $34 $30 $28 $38

The plant capacities and customer orders are as follows:

Plant Capacity (units) Distributor

Orders (units)
Clifton Springs 5,000 D1 2,000
D2 5,000
Danville 3,000 D3 3,000
D4 2,000

How many units should each plant produce for each customer to maximize
profits? Which customer demands will not be met? Show your network model
and linear programming formulation.
ANSWER:
CASE 3
a. Find the critical path and the expected project completion
time.

b. What is the total project cost using the normal times?

Assume that management desires a 12-day project completion time.
c. Formulate a linear programming model that
can be used to assist with the crashing decisions.
d. What activities should be crashed?
e. What is the total project cost for the 12-day completion time?

ANSWER:
a)

b) The total project cost is $8,400 + ($ 800 + $1,200 + $2,000 + $1,500 +

$1,800 + $600 + $500)

c) Formulate a linear programming model that can be used to assist with

the crashing decisions.
Min 600yA + 700yB + 400yC + 500yE + 400yF + 500Yg
s.t
d) What activities should be crashed?
Optimal solution
xA = 3 yA= 0
xB = 2 yB= 0
xC = 7 yC= 1
xD = 7 yD = 0
xE = 12 yE = 1
xF = 10 yF = 0
xG = 12 yG = 0

ACTIVITY CRASH CRASHING COST

C 1 day $ 400
E 1 day 500
TOTAL $ 900

e) What is the total project cost for the 12-day completion time?

ACTIVITY TIME IN DAYS COST

A 3 $ 800
B 2 1200
C 4 2400

D 5 1500
E 5 2300
F 2 600
G 2 500
TOtA $9300
L