Operations Research: Models and Algorithms,

Summer 2023
Final Exam
Instructor: Ling-Chieh Kung
Department of Information Management
National Taiwan University

1 Exam rules
ˆ This is a take-home open-book exam starting at 9:10 AM, August 18 . Please
upload a PDF file with your answers to NTU COOL by 12:10 PM, August 18.
You need to make your file size reasonable. Multiple uploads are allowed, and only
the last upload counts.

ˆ You should write down your answers (e.g., you may write them down on a piece
of paper and then make a photo copy, you may write them down with a pad or a
laptop with a touch screen, etc.). Typed answers will not be accepted. It is your
responsibility to make your answers clearly understandable. You will get no point
if the instructing team cannot recognize your answers. You may answer in Chinese
or English only.

ˆ No matter how you write down your answer, you need to combine everything into
a single PDF file (e.g., if you take five photos of your hand-written answers, you
should submit a PDF file rather than five PNG or JPG files). Those who fail to do
so will lose 10 points.

ˆ Submissions late by no more than 10 minutes will get 10 points off. Submissions
late by more than 10 minutes will not be accepted (i.e., you will get zero point in
this exam). Make sure that your devices are functional and you are connected to
Internet when you want to submit your answers.

ˆ Beside uploading your PDF file to NTU COOL, you may also send your file to our
TA Laurel at r10725062@ntu.edu.tw. Your e-mail submission only serves as backups
and will be checked only if your NTU COOL submission is broken or missing. It
will be considered only if it is received by the due time.

ˆ This is an exam, i.e., you need to complete this exam by yourself. You are allowed
to check any references, textbooks, pre-recorded videos, lecture notes, homework
solutions, on-line forums, etc. However, direct or indirect discussions with
any living person in any way is strictly prohibited . One who violates this
rule will get an F in this course with no exception.

ˆ During the exam, you may use the discussion forum on NTU COOL to ask the
TAs to clarify the meaning of exam problems. The TAs may be unable to answer
questions posted within 30 minutes of the due time. Other formats of questions
will not be answered. You are not allowed to answer other students’ questions.

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2 Problems
1. (5 points) Write down the following statement: “I certify that I have carefully read
the exam rules listed on Page 1. If I violate any of the rules, I agree to be penalized
accordingly.”

2. (20 points; 10 points each) IEDO Oil has refineries in Kaohsiung and Taipei. Cur-
rently, the Kaohsiung refinery can refine up to 3 million barrels of oil per year, and
the Taipei refinery up to 4 million. Once refined, oil is shipped to two distribution
points: Hsinchu and Taichung. IEDO Oil estimates that each distribution point
can sell up to 6 million barrels per year. Because of differences in shipping and
refining costs, the profit earned per million barrels of oil shipped depends on where
the oil was refined and on the point of distribution:

From To Hsinchu To Taichung

Kaohsiung $16,000 $19,000
Taipei $22,000 $18,000

(a) Formulate an LP that maximizes IEDO’s profits for the next year. Do not
attempt to solve the LP. Do not forget to define your decision variables at the
beginning of your formulation.
(b) Continue from the previous problem. IEDO Oil is now considering expanding
the capacity of each refinery. Each million barrels of annual refining capacity
that is added will cost $140,000 for the Kaohsiung refinery and $180,000 for the
Taipei refinery. Capacity can only be added now but can be used in the future
ten years. Formulate an LP that maximizes IEDO’s profits less expansion
costs over a ten-year period. Do not attempt to solve the LP. Do not forget
to define your decision variables at the beginning of your formulation.

3. (20 points; 10 points each) A manufacturer can sell product 1 at a price of $5

per unit and product 2 at a price of $7 per unit. Nine units of raw material are
needed to manufacture one unit of product 1, and seven units of raw material are
needed to manufacture one unit of product 2. A total of 120 units of raw material
are available. The setup costs for producing products 1 and 2 are $30 and $40,
respectively.

(a) Formulate a linear IP that maximizes the profit. Do not multiply decision
variable in your formulation. Do not attempt to solve the IP. Do not forget to
define your decision variables at the beginning of your formulation.
(b) If both products are produced for positive amounts, there is a saving of $20 in
the setup cost (i.e., in total $50 are paid). Formulate a linear IP that maximizes
the profit. Do not attempt to solve the IP. Do not multiply decision variable
in your formulation. Do not forget to define your decision variables at the
beginning of your formulation.

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4. (20 points; 5 points each) Consider the LP

z ∗ = max 2x1 + 3x2

s.t. x1 + 2x2 ≤ 6
2x1 + x2 ≤ 8
xi ≥ 0 ∀i = 1, 2.

(a) Write down the initial tableau.

(b) Instead of entering x1 , enter x2 to complete one iteration. Write down the
tableau after one iteration.
(c) Continue iterating to find an optimal solution. Write down all tableaus you
obtain in every iteration.
(d) Depict the route you go through in the above process on the feasible region of
the original LP.

5. (20 points) For the IP discussed in the lecture video

max 8x1 + 5x2

s.t. x1 + x2 ≤ 6
9x1 + 5x2 ≤ 45
xi ∈ Z+ ∀i = 1, 2,

use the branch-and-bound algorithm to solve it by branching on x2 after you solve

the linear relaxation. Depict the complete branching tree, but do not show how
you solve each node.

6. (15 points) Consider the NLP

min f (x) = x21 − 2x1 x2 + 2x22 + 2x1 .

x∈R2

(a) Find its gradient and Hessian.

(b) Starting at an initial solution x0 = (0, 1), do one iteration of gradient descent
to reach the next solution x1 . When choosing the step size, choose the one
that brings you to the lowest point along the moving direction. Write down
your calculation steps clearly.
(c) Starting at an initial solution x3 = (0, 0), do one iteration of the Newton’s
method to reach the next solution x4 . Write down your calculation steps
clearly.