Topic: UDT is a consulting firm that develops e-commerce projects, systems and

websites for its clients. It has six available consultants and eight client projects are under
contract. The consultants have different technical abilities and experience, and as a result, the
company charges different hourly rates for its services. Also, the consultant’s skill are more
suited for some projects than others, and clients sometimes prefer some consultants over others.
The suitability of a consultant for a project is rated according to a 5-point scale, in which 1 is the
worst and 5 is the best. The following table shows the rating for each consultant for each project,
as well as the hours available for each consultant and the contracted hours and maximum budget
for each project :  

    Project

Consultant Hourly 1 2 3 4 5 6 7 8 Available

wage hours
A $150 3 3 5 5 3 4 3 3 450
B $140 3 3 2 4 5 5 3 3 550
C $160 2 1 3 3 2 1 5 3 500
D $300 1 3 1 1 2 2 5 1 300
E $270 3 1 1 2 2 3 3 3 710
F $150 4 5 3 2 3 4 3 3 860
Project Hours   500 240 400 450 350 460 290 200  
Contract budget  
100 80 120 90 65 85 50 55  
(x1000 USD)

The company wants to know how many hours to assign each consultant to each project in
order to best utilize their skill while meeting clients needs.

a) Formulate a linear programming model and write down the mathematical model
for this problem.
b) Solve this problem using QM and SOLVER
c) If the company wants to maximize revenue while ignoring client preferences and
consultant compatibility, will this change the solution in b. ?
d) Create a sensitivity report. What is the shadow price in this case ?
e) If consultants A and E change their hourly wage from $155 to $200 (A) and from
$270 to $200, will the solution change ?
f) By exprerience, consultant B and E is getting better at their ability, which mean
their capacity for every project now minimum start from 3 instead of 1 or 2, will
the shadow price change ?

–––––––––––––––

a. Formulate a linear programming model and write down the mathematical model for this
problem.
 To formulate a linear programming model I need to know: The decisiveness variables are the
number of hours that a consultant is assigned to take the responsibility for a project:

xiy: The hours that Consultants are assigned to project

In that:
i= A, B, C, D, E, F is Consultant
j= 1, 2, 3, 4, 5, 6, 7, 8 is Project

The final goal is to make use of the ability of the consultants based on their rank. It means
UTC wants to maximize the hours that are specified and rated. The points the higher the
better (from 1 to 5)

To maximize the total consult rates:

F 8
z=∑ ❑ ∑ ❑ R ×( xij)
i= A j=1

In that:
Z is the hours adjusted based on the rated
R is the rates of 6 Consultants

I also have the Available hours as a table below:

Consultant A 8
≤ 450
∑ ❑x Ay
j
Consultant B 8
≤ 550
∑ ❑ x By
j
Consultant C 8
≤ 500
∑ ❑x Cy
j
Consultant D 8
≤ 300
∑ ❑ x Dy
j
Consultant E 8
≤ 710
∑ ❑x Ey
j
Consultant F 8
≤ 860
∑ ❑x Fy
j

The same with Project hours:

Project 1 F
≤ 500
∑ ❑ xi1
i= A
 Project 2 F
≤ 240
∑ ❑ xi 2
i= A
Project 3 F
≤ 400
∑ ❑ xi 3
i= A
Project 4 F
≤ 450
∑ ❑ xi 4
i= A
Project 5 F
≤ 350
∑ ❑ xi 5
i= A
Project 6 F
≤ 460
∑ ❑ xi 6
i= A
Project 7 F
≤ 290
∑ ❑ xi 7
i= A
Project 8 F
≤ 200
∑ ❑ xi 8
i= A

And The Contract budget:

Project 1 F
≤ 100000
∑ ❑ x i 1 ×(Hourly Wage)
i= A
Project 2 F
≤ 80000
∑ ❑ x i 2 ×(Hourly Wage)
i= A
Project 3 F
≤ 120000
∑ ❑ x i 3 ×(Hourly Wage)
i= A
Project 4 F
≤ 90000
∑ ❑ x i 4 ×(Hourly Wage)
i= A
Project 5 F
≤ 65000
∑ ❑ x i 5 ×(Hourly Wage)
i= A
Project 6 F
≤ 85000
∑ ❑ x i 6 ×(Hourly Wage)
i= A
Project 7 F
≤ 50000
∑ ❑ x i 7 ×(Hourly Wage)
i= A
Project 8 F
≤ 55000
∑ ❑ x i 8 ×(Hourly Wage)
i= A

The hours that they consult per project: xiy ≥ 0

If I apply the Mathematical Models to solve this problem:

First, I need to define the variables as the table below:

A1, A2,...A8: Hours that Consultant A is assigned to do Project 1, 2,..., 8

 Project
B1, B2,...B8: Hours that Consultant B is assigned to do Project 1, 2,..., 8
Project
C1, C2,...C8: Hours that Consultant C is assigned to do Project 1, 2,..., 8
Project
D1, D2,...D8: Hours that Consultant D is assigned to do Project 1, 2,..., 8
Project
E1, E2,...E8: Hours that Consultant E is assigned to do Project 1, 2,..., 8
Project
F1, F2,...F8: Hours that Consultant F is assigned to do Project 1, 2,..., 8
Project

The Objective or the Total Suitability can be calculated:

MAX=3*A1+3*A2+5*A3+5*A4+3*A5+3*A6+3*A7+3*A8+3*B1+3*B2+2*B3+5*B4+5*B
5+5*B6+3*B7+3*B8+2*C1+1*C2+3*C3+3*C4+2*C5+1*C6+5*C7+3*C8+1*D1+3*D2+1*
D3+1*D4+2*D5+2*D6+5*D7+1*D8+3*E1+1*E2+1*E3+2*E4+2*E5+1*E6+3*E7+3*E8+4
*F1+5*F2+3*F3+2*F4+3*F5+5*F6+4*F7+3*F8.

Constraints:

Constraints 1: The total hours of Consultant need to be ≤ The

Available hours
A1+A2+A3+A4+A5+A6+A7+A8 ≤ 450
B1+B2+B3+B4+B5+B6+B7+B8 ≤ 550
C1+C2+C3+C4+C5+C6+C7+C8 ≤ 500
D1+D2+D3+D4+D5+D6+D7+D8 ≤ 300
E1+E2+E3+E4+E5+E6+E7+E8 ≤ 710
F1+F2+F3+F4+F5+F6+F7+F8 ≤ 860

Constraints 2: The total hours per Project is equal to the Project hours
A1+B1+C1+D1+E1+F1 = 500
A2+B2+C2+D2+E2+F2 = 240
A3+B3+C3+D3+E3+F3 = 400
A4+B4+C4+D4+E4+F4 = 450
A5+B5+C5+D5+E5+F5 = 350
A6+B6+C6+D6+E6+F6 = 460
A7+B7+C7+D7+E7+F7 = 290
A8+B8+C8+D8+E8+F8 = 200

Constraints 3: Total revenue of each Project ≤ Contract budget

150*A1+140*B1+165*C1+300*D1+270*E1+150*F1 ≤ 100000
150*A2+140*B2+165*C2+300*D2+270*E2+150*F2 ≤ 80000
150*A3+140*B3+165*C3+300*D3+270*E3+150*F3 ≤ 120000
150*A4+140*B4+165*C4+300*D4+270*E4+150*F4 ≤ 90000
150*A5+140*B5+165*C5+300*D5+270*E5+150*F5 ≤ 65000
150*A6+140*B6+165*C6+300*D6+270*E6+150*F6 ≤ 85000
150*A7+140*B7+165*C7+300*D7+270*E7+150*F7 ≤ 50000
150*A8+140*B8+165*C8+300*D8+270*E8+150*F8 ≤ 5500

b. Solve this problem using QM and SOLVER

This section has 2 demands so that I will explain to 2 parts
Part 1: Solve this problem using QM
I choose Module then choose the Linear Programing Options. After choosing the
correct type of module, I define the number of constraints and the Number of
Variables.
I have 3 types of constraints: The available hours of each Consultant, The hours
of each project and revenue of each project:
● The available of each Consultant: I have 6 Consultants called as A,
B, C, D, E, F. So that I also have 6 Available hours of each person
It means: Available hours of A, Available hours of B,… E
● The hours of each project: I have 8 projects. It leads to 8 Constraints:
Hours of Project 1, 2, 3… 8
● The revenue of each project: Same as the hours of each project I also have:
Revenue Project 1, 2, 3… 8
Add 6 consultants to 8 constraints of hours and 8 constraints of revenue, I
have 22
Constraints total
Next, Column 1 will show that consultants A do the projects 1.
Column 2 will express that consultants A do the project 2…
So that I have 6 consultants with 8 projects. The total Columns Ire called Variables
can calculate by: 6*8 = 48 Variables
Choose the objectives Maximize. After that, in the row of Maximize I fill with the
numbers (the points) in the table of the topic.

Part 2: Solve this problem using SOLVER

c. If the company want to maximize revenue while ignoring client preferences and
consultant compatibility, will this change the solution in b. ?

If the company want to maximize revenue while ignoring client preferences and
consultant compatibility, the solution in b will change:

The picture above is the result of this case, compare with the solution in b below:
It can be understandable that the solution in c is higher than b. Because in this case,highest revenue is
the goal that the company wants to put attention to. In exchange for maximizing the revenue, they
ignored the client preferences and consultant compatibility.
In some cases and if only from an economic point of view, this seems to be the more optimal way. But
a decisive factor to the success of a service company lies in the user experience. It would be worse if
their customer preferences were ignored. And it will probably create more problems when ignoring
consultant compatibility

d. Create a sensitivity report. What is the shadow price in this case?

By using Solver, I can easily expertize a sensitive report. If you want to see more
detailed and completion, access the Excel file attachment.
Sensitivity analysis gives you insight into how the optimal solution changes when
changing the coefficients of the model. After the solver finds a solution, you can generate a
sensitivity report
And in the Shadow price is the column that colored orange:

The shadow price tells us the optimal solution can be increased or decreased
if we change the right hand values (resources available) by one unit.
e. If consultants A and E change their hourly wage from $155 to $200 (A) and
 from $270 to $200, will the solution change ?

The solution will change as the picture below express

Compare with the sentence b, when it does not have any change:

If consultants A and E change their hourly rates from $155 to $200 (A) and from $270 to $200,
there will be changes in the number of hours each consultant spends on each Project project,
resulting in the following changes:

Assignment of A and E:
Consultant A:
Assignment:
- 400 hours 🡪 0 hours for project 3
- 50 hours -> 0 hours for project 4
 - 0 hours -> 106 hours for project 6
- 0 hours -> 144 hours for project 7
- 0 hours -> 200 hours for project 8

Consultant E:
Assignment:
- 208,333 hours -> 310 hours for project 1
- 0 hours -> 400 hours for project 3
- 95,95 hours -> 0 hours for project 6
- 200 hours -> 0 hours for project 8
The Total revenue also increased $497,371 ->$540,800.

Conclusion: Revenue varies with the increase and decrease in the hourly wages of consultant A
and consultant E.

f. By experience, consultants B and E are getting better at their ability, which means
their capacity for every project now minimum starts from 3 instead of 1 or 2, will the
shadow price change?
Compared with the shadow price in the beginning:

By experience, consultant B and consultant E are getting better at their ability, which means their
capacity for every project now minimum starts from 3 instead of 1 or 2. However, the shadow
price changed.