E1 (R2.12 adjusted) A farmer in Georgia has a 100-acre farm on which to plant watermelons and cucumbers.

Every acre planted with watermelons requires 50 gallons of water per day and must be prepared for planting with 20 pounds of fertilizer. Every acre planted with cucumbers requires 75 gallons of water per day and must be prepared for planting with 15 pounds of fertilizer. The farmer estimates that it will take 10 hours of labor to harvest each acre planted with watermelons and 15 hours to harvest each acre planted with cucumbers. He believes that the watermelons will sell for 3 euro each and that the cucumbers will sell for 1 euro each. Every acre planted with watermelons is expected to yield 80 salable units. Every acre planted with cucumbers is expected to yield 300 salable units. The farmer can pump about 6000 gallons of water per day for irrigation purposes from a shallow swell. He can buy as much fertilizer as he needs at a cost of 100 euro per 50 pounds bag. Finally, the farmer can hire laborers to harvest the fields at a rate of 10 euro per hour. If the farmer sells all the watermelons and cucumbers he is producing, how many acres of each crop should the farmer plant to maximize his profits? (A) Formulate an LP model for this problem. (B) Sketch the feasible region for this model (like Figure 2.1). (C) What is the optimal solution? (D) Now the farmer finds a client who wants to pay 1.5 euro for each cucumber. Does that change the optimal solution? If so, how? (E) Consider the original problem again (so disregard (D) ). Imagine the farmer can buy additional irrigation water. He is paying 150 euro for 200 gallon. He can buy as much additional irrigation water as he needs. How would you model the problem now?

E2 A company is producing bicycles over a period of a month, say that is exactly 4 weeks of 5 working days. Let the number of bicycles the company produces on a day t be denoted by qt . The company knows its customers demands for each day. Let the demand on day t be denoted by dt . If the companys production exceeds demand, then remaining bicycles will be kept in stock for the next day. Denote the inventory or stock level at the end of a day t by st .Initially, the company has 5 bicycles on stock. To produce one bicycle, the company requires 2 hours of labor. Keeping one bike in inventory overnight will cost 20 (due to insurance cost). The company has two employees working on a fulltime contract basis. Each of them is allowed to work at most 8 hours a day and earns 50 euro a day, no matter how much he or she will be working. Furthermore, the company can hire one additional flexible worker for 8 euro per hour. Also, he may work at most 8 hours a day. Finally, at the end of each day, 30% of the next days demand should be on stock. (A) Formulate an LP model for this problem. (B) A binary variable is a variable which equals zero or one. Producing less than four bicycles on a given day, is relatively expensive as the whole facility needs to be opened en closed again for only a small number of bikes. Assume that the company only wants to produce on a given day if it is producing more than 3 bikes on that day (that is, the company is either producing more than three bikes or none at all at a given day). How would you incorporate this constraint using binary variables? (You may assume that at most 12 bikes a day can be produced).

E3 (R7.14 adjusted). Goal Programming. A new Italian restaurant is opening in several locations in the Maastricht area. The marketing manager for these stores has a budget of 150000 euro to use in advertising and promotions for the new stores. The manager can run magazine ads at a cost of 2000 euro each that result in 250000 exposures each. TV ads result in approximately 120000000 exposures each, but cost 12000 each. The manager wants to run at least five TV ads and ten magazine ads, while maximizing the number of exposures generated by the advertising campaign. But the manager also wants to spend no more than 120000 euro on magazine and TV advertising so that the remaining 30000 could be used for other promotional purposes. (A) Formulate an (integer) linear program for the model above. Let Xm denote the number of magazine ads and let Xtv denote the number of TV ads. The optimal solution to the problem above is given by 30 magazine ads and 5 TV ads which results in a cost of 120000 euro and 13.500.000 exposures. The manager however, actually has one additional goal; reaching an exposure of 15.000.000. Hence he has four goals: Goal 1: Running at least 10 magazines ads. Goal 2: Running at least 5 TV ads. Goal 3: Spending no more than 120.000 euro. Goal 4: Reaching an exposure of at least 15.000.000. As these four goals are not attainable simultaneously, the manager has to make a tradeoff. That is, to establish some of it goals, he must accept that some of his other goals cannot be reached. For example, due to this tradeoff, he cannot run 10 magazine ads, or he cannot run 5 TV ads, or he needs to speed more than 120.000 euro, or cannot reach an exposure of 15.000.000. The manager decides to minimize the total deviation over the four goals. Introduce for each goal two artificial variables representing either the negative or positive component of the deviation; e.g. d1- and d1+ for the first goal respectively. Consider some solution (Xm , Xtv). If Xm 10, then the positive deviation wrt the magazine ads is d1+ = Xm 10 while the negative deviation equals zero. Similarly, if Xm <10, then the negative deviation d1- = 10 - Xm while the positive deviation equals zero. The constraint with respect to the magazine ads can then be written as Xm + d1- - d1+ = 10. For the third goal we introduce d3and d 3+ respectively. If 2000 Xm + 12000 Xtv > 120000, then d 3+ = 2000 Xm + 12000 Xtv 120000 and d3- = 0. On the other hand, if 2000 Xm + 12000 Xtv < 120000, then d 3- = 120000 2000 Xm - 12000 Xtv and d 3+ = 0. The constraint corresponding to the third constraint then becomes 2000 Xm + 12000 Xtv - d 3+ + d 3- = 120000. (B) Construct an (integer) linear program which minimizes the total deviation. Do you believe that this is a good model? (C) Convinced by your arguments, the manager decides to minimize the sum of the relative deviations. The relative deviation equals the absolute deviation over the target value, e.g. let Xm = 12, then the positive component of the deviation equals 12-10=2 while the relative deviation = (12-10)/10 = 0.2. Furthermore, the owner decides that he only cares about not meeting 10 magazine ads, not meeting 5 TV ads, spending more than 120000 euro or not reaching the desired exposure of 15.000.000. Thus, he does not care anymore about running more ads than the minimum, spending less or meeting more than the desired exposure. Formulate the (integer) linear program. Do you believe that this model is an improvement to the model in (B) ? (D) Do you see any shortcomings of the model in (C)? Can you think of a better model which allows you to play with importance of the deviations of each of the four goals?

E4 (R7.13 adjusted). Multi Objective Linear Programming. The owner of a meat processing plant wants to determine the best blend of meats to use in the next production run of hamburgers. Three sources of meat can be used. The following table summarizes relevant characteristics of these meats: Meat 1 Cost per pound in euros % Fat % Protein % Water % Filler 0.75 20 65 12 3 Meat 2 0.87 12.5 72.5 10 5 Meat 3 0.98 5 80 8 7

A local elementary school has ordered 500 pounds of meat for 1.1 euro per pound. The only requirement is that the meat consists of at least 75% protein and at most 10% each of water and filler. Ordinarily, the owner would produce the blend of meats in the least costly manner. However, with the concern of too much fat in school lunches, the owner also wants to produce a blend that minimizes the fat content of the meat produced. (A) Formulate a Multi Objective Linear Program for this problem, i.e. formulate an LP where the constraints set by the school are introduced as hard constraints and where we have two objectives, one for cost and one for fat. (B) If you solve the problem with respect to the constraints set by the school and by minimizing over the total costs (while you disregard the objective of minimizing the amount of fat), the optimal solution is (250,0,250) yielding cost of 432.50 euro and a fat percentage of 12.5%. Lets disregard the objective of minimizing the amount of fat for the moment. However, you do want to limit the deviation of the required percentage of fat in the meat blend. Lets say, the percentage of fat in the blend of meat may not deviate by more than one percent from 11% (in either direction). How would you model the problem now? (C) If you solve the problem with respect to the constraints set by the school and by minimizing over the percentage of fat in the meat blend (while you disregard the objective of minimizing cost), the optimal solution is (0,1000/3,500/3) yielding cost of 453.33 euro and a fat percentage of 10%. Thus, if we consider both objectives together, none of the feasible solutions can have a fat percentage lower than 10%. If one only cares about minimizing cost, one achieves a solution of cost 432.5 while the fat percentage deviates by (12.5-10)/10 *100% = +25% of the optimal fat percentage. Similarly, if one only cares about fat percentages, one achieves a solution with a fat percentage of 10% and where costs deviate by (453.33-432.5)/432.5*100% = +4.8% from the optimal cost. Can you formulate an LP model in which you minimize the accumulated percentage deviation of fat and cost? How would the weighted model look like, that is, the owner assigns a weight of w1 to each percentage deviation of cost and w2 to each percentage of deviation of fat and he wants to minimize the weighted sum? Note that the percentage deviation equals the relative deviation of exercise E3 multiplied by 100%.

(D) Again, the owner assigns a weight of w1 to each percentage deviation of cost and w2 to each percentage of deviation of fat. Now he wants to minimize the maximum among the two weighted deviations. How would you model the problem now?

E5. Flow Problem I. A company has received an order for 39 microwave ovens, 7 of which have to be delivered at the end of week one, 9 at the end of week two, 12 at the end of week three, and 11 at the end of week four. The company has committed itself to supply the microwave ovens on time. The production cost is 10,000 per microwave oven in the first week and increases with 100 per week. Production capacity is 10 microwave ovens per week. In case of an emergency, this capacity can be increased (by working overtime) to 12 in the last two weeks, but at an additional cost of 1,000 per microwave oven produced in overtime. Microwave ovens can be kept in inventory at a cost of 550 per microwave oven per week. (A)Visualize the situation by drawing a diagram, i.e., a flow sheet. Determine the relevant decision variables and show them in your diagram. (B)Model the problem as a linear program.

E6. Flow Problem II. A student has received from her parents a lump sum of 90,000 to finance her study. The study will take 5 years; the cost of the study and living expenses are estimated to be 16,000 for the first year, and will increase annually with 500 to 18,000 in the fifth year. The student wants to invest her money so as to maximize the amount of money that will be available at the beginning of the sixth year. She wants to use this money to travel around the world. She is considering two types of investments. First, there is a saving account that will have a term of notice of one year and will give an interest rate of 4%. Furthermore, there are two types of bonds of face value 1,000 that she can buy at the beginning of each year. The first bond has a maturity of 2 years, the cost is 980, and the yearly coupon is 60 paid at the beginning of each year. The second bond has a maturity of 4 years, the cost is 965, and the yearly coupon is 65 paid at the beginning of each year. The investments should be such that at the beginning of each year the total amount of money needed (i.e. for study and living expenses) for that year is available. To be a bit more specific about the timings of the various payments, we assume that a bond with maturity 2 years bought at the beginning of year t will pay the coupon at the beginning of year t+1 and t+2, and will pay the face value at the beginning of year t+2. Similarly, we assume that a bond with maturity 4 years bought at the beginning of year t will pay the coupon at the beginning of years t+1, t+2, t+3 and t+4, and will pay the face value at the beginning of year t+4. (A)Visualize the situation by drawing a diagram, i.e., a flow sheet. Determine the relevant decision variables and show them in your diagram. (B)Model the problem as a linear program.

E7 Capital budgeting You can invest in four projects: projects 1, 2, 3, and 4. You have a budget available of 14 M Euro. They have the following properties: Project Initial investment (in M Euro) Present value (in M Euro) 1 4 18 2 5 23 3 3 16 4 6 26

Extra constraints: If we invest in project 2, then we must also invest in project 3. If we invest in project 2, then we may not invest in project 4. If we invest in projects 1 and 3, then we must also invest in project 4. Model this problem as an integer linear program.

E8 Capital budgeting A car manufacturer produces three different cars: Compact, Medium, Large. Each of the cars has a certain amount of resource requirements (steel and labor), and a profit. This information is given in the table below. The availability of each of the resources is given in the last column of the table. As a side constraint: if production on a car is started, then at least 1000 should be produced. Model this problem as an integer linear program. Compact Steel (tons) Labor (hours) Profit (Euro) 1.5 30 2000 Medium 3 25 3000 Large 4 40 4000 Total 6000 60000

E9

Farkas Lemma.

The system {Axb} is infeasible iff the system {ATy=0, y0, by<0} is feasible. Hint: Exercise 3.4: the system {max bx Ax0, x0} has optimum x=0 or is unbounded. This also applies to the system {min by: ATy=0, y0}.