From Excel solver (a)

Investment
Operations Stock fund money market
Minimum investment 0 1
total fund 1 2
minimum return 5 4

risk rate annualy 4 3

Model
Decision Variables
stock money market
number of units 4000 10000 0

Minimum risk 46000

Constraints operations Amount available

Minimum investment 10000 >= 3000
total fund 24000 <= 24000
minimum return 60000 >= 60000
From Excel solver ©
Investment
Operations Stock fund money market
Minimum investment 0 1
total fund 1 2
minimum return 5 4

return rate annualy 5 4

Decision Variables
stock money market
number of units 18000 3000 0

Maximum return 102000

Constraints operations Amount available

Minimum investment 3000 >= 3000
total fund 24000 <= 24000
minimum return 102000 >= 60000
 Soluition
Amount
3000 A) The units of stock and money market fund by minimizing the total risk index for the
as follows-
24000
60000

The minimum risk index of the portfolio equation will be

4S+3M S = Units of stock fund

M = Units of Money market fund
Constraint equation s

0S+1M >= 3000 for minimum investment on money market fund

1S + 2M <= 24000 for total fund
5S + 4M >= 60000 for minimum return

To show all solution points that satisfy this relationship, we start by graphing the
solution points satisfying the constraint as an equality.If we plot the graph S on the
axix and M on the Y axis for three contraints lines by putting S=0 in the constraint
equation to find the value of M and put it on the Y axis and By putting M=0 in the
equations to find the value of S and put it on the X axix, then the graph will be as
follows-

S M 18000
minimum investment 0 3000 16000
0 0
14000
total fund 0 12000
24000 0 12000
minimum return 0 15000 10000
12000 0 8000
6000

s m 4000
0 15333.33 2000
11500 0
0
0 00 00
0
00
0
For minimum risk index of the portfolio 50 10 15
the equation will be plotted in the graph
based on the follows
 4S + 3M = 46000

Lets assume minimum risk is P

So, 4S+3M = P
3M=-4S+P
M = -(4/3)S+(1/3)P

The coefficient of S, -4/3, is the slope of the line, and the term
The slope (-4⁄3) is the same for each profit line because the risk

When the risk index line is moved towads the origin, the objec
46000 intersects the feasible region at the extreme point S = 4
point provides the minimum-risk solution with an objective fun
graph, we can see that the total fund constraint and the minim

Optimal solution is Stock fund = 4000, money marke

minimum risk index is = 4*4000+3*10000

Amount
3000
24000 B)
60000 The annual income with maintaining minimum risk index portfolionis as f

return equation - 5S + 4M
(5*4000)+(4*10000)
Annual income 60000

C) To maximus the return, the objective equation is

5S + 4M

S M 30000
minimum investment 0 3000
0 0 25000

20000
 30000

25000
total fund 0 12000
24000 0 20000

15000

10000
s m
0 25500 5000
20400 0
0
For maximum return 0 5000
the equation will be plotted in the graph
based on the follows
5S + 4M = 102000

Lets assume maximum return is P

So, 5S+4M = P
4M=-5S+P
M = -(5/4)S+(1/4)P

The coefficient of S, -5/4, is the slope of the line, an

The slope (-5⁄4) is the same for each profit line becau
When the maximum return line is moved further fr
the intersection of constra

The euation is
0S+1M >= 3000 for minimum investment
1S + 2M <= 24000 for total fund

After solving the equation to find the val

S = 18000 M = 3000

Optimal solution is Stock fund = 18000, m

maximum return is = 5*18000+4*3000

izing the total risk index for the portfolio with graph is
llows-

Cost of units of money market fund $100

of stock fund Cost of units of stock fund $50
of Money market fund

market fund

nship, we start by graphing the

y.If we plot the graph S on the X
by putting S=0 in the constraint
axis and By putting M=0 in the
axix, then the graph will be as

18000
16000
14000
12000
10000 minimum investment
Total fund
8000
minimum return
6000 For minimum risk index of
the portfolio
4000
2000
0
0 00 00
0
00
0
00
0
00
0
00
0
50 10 15 20 25 30
 slope of the line, and the term (1⁄3) P is the M intercept
each profit line because the risk index lines are parallel

ed towads the origin, the objective function line 4S + 3M =

gion at the extreme point S = 4000 and M = 10000. This extreme
sk solution with an objective function value of 46000. From the
l fund constraint and the minimum return constraint are binding.

tock fund = 4000, money market fund = 10000

s = 4*4000+3*10000
46000

mum risk index portfolionis as follows-

(5*4000)+(4*10000)

constraints are 0S+1M >= 3000 for minimum investment on money market fund
1S + 2M <= 24000 for total fund

30000

25000

20000

minimum investment
 30000

25000

20000

minimum investment
15000
Total fund
For maximum return
10000

5000

0
0 5000 10000 15000 20000 25000 30000

m return is P

-5/4, is the slope of the line, and the term (1⁄4) P is the M intercept
same for each profit line because the maximum return lines are parallel
m return line is moved further from the origin, the optimum solution point is
the intersection of constraint line- total fund

3000 for minimum investment on money market fund

= 24000 for total fund

ing the equation to find the value of S and M

olution is Stock fund = 18000, money market fund = 3000

return is = 5*18000+4*3000
102000
 From Excel solver
Gasolin production
Operations Regular Premium
Production capacity 1 1
Crudeoil availability 0.3 0.6
AT most premium produstion 0 1

Proifit contribition 0.3 0.5

Model
Decision Variables
regular premium
Gallons of gasolin 40000 10000 0

Maximum profit 17000

Constraints operations Amount available

Production capacity 50000 <= 50000
Crudeoil availability 18000 <= 18000
AT most premium produstion 10000 <= 20000
 A)
Amount Lets assume
50000 R = regular gasolin
18000 p= premium gasolin
20000
Objective equation

Max 0.3R + 0.5P = Income (I)

Constraints

R +P <= 50000 ------- (1)

0.3R + 0.6P <= 18000 ---(2) 9000 12000
p <= 20000 --------------(3)
R*P >= 0

To show all solution points that satisfy this relationship, we start by graphing the
solution points satisfying the constraint as an equality.If we plot the graph R on the X
axix and P on the Y axis for three contraints lines by putting R=0 in the constraint
equation to find the value of p and put it on the Y axis and By putting P=0 in the
equations to find the value of R and put it on the X axix, then the graph will be as
follows-

60000
R P
Total gasolin production 0 50000 50000
50000 0
Crude oil availability 0 30000 40000
60000 0
Premium production 0 20000 30000
0 0
20000
R P
Total profit contribution 0 34000 10000
0.3R + 0.5P = 17000 56666.67 0
0
0 20000 40000 60000 800

Let assume income - I

0.3R + 0.5P = I
 P = = -(0.3/0.5)R + (1/0.5)I

The coefficient of R, -0.3/0.5, is the slope of the line, and the term (1/0.5)I is the D in
The slope (-0.3⁄0.5) is the same for each profit line because the profit lines are parall
When the profit line is moved further from the origin, the optimum solution poi
intersection of constraint lines- and inteiotal gasolin production and premium pr

The euation is
R +P <= 50000 ------- (1)
0.3R + 0.6P <= 18000 ---(2)

After solving the equation to find the value of S and D

R = 40000 P = 10000

Optimal solution is regular gasolin = 40000, premium gasolin = 10000

Maximum profit contribution is = 0.3*40000+0.5*10000

17000

B)

The optimal solution to a linear program can be found at an extreme point of the feasible region that
provides the largest profit contribution. The extremr ponit is R = 40000 and P= 10000. and the maximum
porofit is (0.3R + 0.5P) = 17000

C) For slack period the following calculations are needed

Regular Gasolin Premium Gasolin Slack period

Constraint 1 40000 10000 <= 50000 0
Constraint 2 12000 6000 <= 18000 0
Constraint 3 0 10000 <=20000 10000

Here the slack period for constrain 3 is 10000 because it is unused for the limitation of availability
capacity. For the contraint 1 and 2 there is no slack period. Unused capacity makes no con tributi
have coefficients of zero in the objective function. After the addition of three slack variables, den
mathematical model becomes -

Objective equation

Max 0.3R + 0.5P + 0S1 + 0S2 + 0S3

Constraints
 R +P + S1 <= 50000 ------- (1)
0.3R + 0.6P +S2 <= 18000 ---(2)
p + S3<= 20000 --------------(3)
R*P*S1*S2*S3 >= 0

For the optimul solution, Slack variable is

S1 = 0, S2 = 0 and S3 = 10000

D)
From the above solution and graph, we can say that, Constraint 1 and constraint 2
region at the extreme point because they have utilized all the values of their capac
zero slack.
art by graphing the
the graph R on the X
0 in the constraint
putting P=0 in the
he graph will be as

Crude oil availability

Total gasolin production
Premium production
Total profit contribution

0000 40000 60000 80000

and the term (1/0.5)I is the D intercept
cause the profit lines are parallel
rigin, the optimum solution point is the
lin production and premium production.

10000

e of S and D

0, premium gasolin = 10000

00+0.5*10000

int of the feasible region that

nd P= 10000. and the maximum

Slack period

for the limitation of availability of crude oil and total production

ed capacity makes no con tribution to profit; thus, slack variables
on of three slack variables, denoted as S1, S2 and S3, the
3<= 20000 --------------(3)

t, Constraint 1 and constraint 2 bind the the feasible

zed all the values of their capacity and they will have
slack.
 From Excel solver
operation
Operations A B Amount
Constraint 1 -4 3 3
Constraint 2 1 1 3

MAX 1 2

Model
Decision Variables
A B
Units 3 0 0

Max 3

Constraints operations Amount available

Constraint 1 -12 <= 3
Constraint 2 3 <= 3
 A)

Max
To show all solution points that s
1A -2B solution points satisfying the const
axix and B on the Y axis for two
equation to find the value of B a
Constraint equations to find the value of A a

(-4)A + 3B <= 3 -----(1)

1A-1B<=3 ---------(2)
A.B >= 0

A B A B
Constraint 1 0 1 Max 0 -1.5
-0.75 0 1A-2B = 3 3 0
Constraint 2 0 -3
3 0

1.5
1
0.5
0
-1 -0.5 0 0.5 1 1.5 2 2.5 3
-0.5
-1
-1.5
-2
-2.5
-3
-3.5

b) Yes the feaseal region is unbounded.

graphed the feasible region associated with this problem. Note that we can on
because the feasible region extends indefinitely in the direction of the X and y
unbounded.
C) Optimal solution is A = 3, B = 0

maximization = 1*3-2*0 1A-2B

3

D) In this unbounded feaseal region, we see that the solution to this problem m
be able to reach some feasible solution with a larger value. Thus, we say that
w all solution points that satisfy this relationship, we start by graphing the
points satisfying the constraint as an equality.If we plot the graph A on the X
nd B on the Y axis for two contraints lines by putting A=0 in the constraint
on to find the value of B and put it on the Y axis and By putting B=0 in the
ns to find the value of A and put it on the X axix, then the graph will be as
follows-

1.5 2 2.5 3 3.5

constraint 1
constraint 2
max

we have
lem. Note that we can only indicate part of the feasible region
e direction of the X and y axis. So the feaseal region is
olution to this problem may be made as large as we desire. we will always
r value. Thus, we say that the solution to this linear program is unbounded.
 A) from excel solver
Production time
Operations Standard Delux Time Available
Cutting & Dyeing 0.7 1 630
Sewing 0.5 0.833333 600
Finishing 1 0.666667 708
Inspecting & Packaging 0.1 0.25 135
Profit per bag 10 18

Model
Decision Variables
Standard bag (S) Delux bag (D)
Bags Produ 300 420 0

Maximius To 10560

Constraint Hours Used Hours Available

Cutting & 630 <= 630
Sewing 499.999999986 <= 600
Finishing 580.00000014 <= 708
Inspecting 135 <= 135
B) from excel solver
Production time
Operations Standard Delux Time Available
Cutting & Dyeing 0.7 1 630
Sewing 0.5 0.833333 600
Finishing 1 0.666667 708
Inspecting & Packaging 0.1 0.25 135
 Profit per bag 20 9

Model
Decision Variables
Standard bag (S) Delux bag (D)
Bags Produ 708 0 0

Maximius To 14160

Constraint Hours Used Hours Available

Cutting & 495.6 <= 630
Sewing 354 <= 600
Finishing 708 <= 708
Inspecting 70.8 <= 135

C) from excel solver

Production time
Operations Standard Delux Time Available
Cutting & Dyeing 0.7 1 630
Sewing 0.5 0.833333 750
Finishing 1 0.666667 708
Inspecting & Packaging 0.1 0.25 135
Profit per bag 10 9

Model
Decision Variables
Standard bag (S) Delux bag (D)
Bags Produ 539.9999998425 252.00000011025 0

Maximius To 7667.99999941725
Constraint Hours Used Hours Available
Cutting & 630 <= 630
Sewing 480.000000004725 <= 750
Finishing 708 <= 708
Inspecting 117.000000011813 <= 135
 Soluition

Time Available A) If the profit contribution for the delux bag is 18 and Standard bag is 10, The optimal solution a
contribution with graph will be as follows-

The maximum profit contribution equation will be

10S+18D

Constraint equation s

7/10S+1D <= 630 for cutting and dyeing

1/2S + 5/6D <= 600 for sewing
1S + 2/3D <= 708 for Finishing
1/10S + 1/4D <= 135 for inspecting and packaging

To show all solution points that satisfy this relationship, we start by graphing the
solution points satisfying the constraint as an equality.If we plot the graph S on the X
axix and D on the Y axis for four contraints lines by putting S=0 in the constraint
equation to find the value of D and put it on the Y axis and By putting D=0 in the
equations to find the value of S and put it on the X axix, then the graph will be as
follows-

S D
Cutting and dyeing 0 630
900 0
Sewing 0 720
1200 0
Finishing 0 1062
708 0
Inspecting & Packaging 0 540
1350 0

1200

1000

800

Cutting and dyeing

600 Sewing
Finishing
Inspecting & Packaging
400
 800

Cutting and dyeing

600 Sewing
Finishing
Inspecting & Packaging
400

200

0
0 200 400 600 800 1000 1200 1400 1600

Lets assume Profit is P

So, 10S+18D=P
18D=-10S+P
D = -5/9S+1/18P

The coefficient of S, -5/9, is the slope of the line, and the term 1⁄18 P is the D intercept
The slope (-5⁄9) is the same for each profit line because the profit lines are parallel
When the profit line is moved further from the origin, the optimum solution point is the
intersection of constraint lines- cutting & dyeing and intersection & packging.

The euation is
7/10S+1D <= 630 for cutting and dyeing
1/10S + 1/4D <= 135 for inspecting and packaging

After solving the equation to find the value of S and D

S = 300 D = 420

Optimal solution is Standard bag = 300, Delux bag = 420

Maximum profit contribution is = 10*300+420*18

10560

B) If the profit contribution for the standard bag is 20 and delux bag is 9, The optimal
contribution with graph will be as follows-
Time Available

The maximum profit contribution equation will be 20S+9D

 Lets assume Profit is P

So, 20S+9D=P
9D=-20S+`P
D = -20/9S+1/9P

The coefficient of S, -20/9, is the slope of the line, and the term 1⁄9 P is the D intercept
The slope (-20⁄9) is the same for each profit line because the profit lines are parallel
When the profit line is moved further from the origin, the optimum solution poin
intersection of constraint lines- Finishing and X axis which is inside the feasible re

The euation is

1S + 2/3D <= 708 for Finishing

At the intersection point with the axis with finishing contraint line D =0

From the above equation the value of S = 708

Optimal solution is Standard bag = 708, Delux bag = 0

Maximum profit contribution is = 20*708+0*9

14160

c) If the sewing operation capacity is increased to 750 hours

Time Available Then contraint equation for sewing will be

1/2S + 5/6D <= 750 for sewing

1200
Then the grapgh will be as follows-
1000
S D
Cutting and dyeing 0 630 800
900 0
Sewing 0 900 600
1500 0
Finishing 0 1062 400
708 0
Inspecting & Packaging 0 540 200

0
0 200 400 600 800 100012001
 400

200
1350 0
S D 0
Total profit contribution 0 852 0 200 400 600 800 100012001
10S + 9D = 7668 766.8 0

Optimal solution for Standard bag = 540, Delux bag = 252

Maximum profit contribution is = 10*540+252*9

7668

As the feasible region is not changed due to increasing sewing capacity and profit line is
also not changed, so the optimul solutiuon and maximum profit contribution will not be
changed
ag is 10, The optimal solution and profit
s follows-

rt by graphing the
the graph S on the X
0 in the constraint
putting D=0 in the
he graph will be as

Cutting and dyeing

Sewing
Finishing
Inspecting & Packaging
 Cutting and dyeing
Sewing
Finishing
Inspecting & Packaging

P is the D intercept
nes are parallel
timum solution point is the
ersection & packging.

and delux bag is 9, The optimal solution and profit

ph will be as follows-
he term 1⁄9 P is the D intercept
the profit lines are parallel
gin, the optimum solution point is the
is which is inside the feasible region.

traint line D =0

cutting & dyeing

sewing
finishing
Inspecting & Packaging
Total profit contribution

200 400 600 800 1000120014001600

 Inspecting & Packaging
Total profit contribution

200 400 600 800 1000120014001600

acity and profit line is

ontribution will not be
prob-21
a)
Max 2A+3B A B
Z 2 3 Max
s.t Constraint 1 5 5 <= 400
5A+5B <= 400 Constraint 2 -1 1 <= 10
(1A)+1B <= 10 Constraint 3 1 3 >= 90
1A+3B >= 90

A.B >= 0
To show all solution points that satisfy this relationship, we start by graphi
points satisfying the constraint as an equality.If we plot the graph A on the
the Y axis for three contraints lines by putting A=0 in the constraint equati
value of B and put it on the Y axis and By putting B=0 in the equations to fin
and put it on the X axix, then the graph will be as follows-

A B
Constraint 1 0 80
80 0
Constraint 2 0 10
-10 0
Constraint 3 0 30
90 0

As by putting B=0 , A = -10 and it can intersect the others contraint line if
extended. For extending contraint 2,
A B
Constraint 2 -10 0
40 50

From Excel solver

Operations A B Constraint limit

Constraint 1 5 5 <= 400
Constraint 2 -1 1 <= 10
Constraint 3 1 3 >= 90

Coefficient of objective 2 3

Model
 Decision Variables
A B
value 75 5

Maximius To 165

Operations Constraint limit

Constraint 1 400 <= 400
Constraint 2 -70 <= 10
Constraint 3 90 >= 90
 tionship, we start by graphing the solution
we plot the graph A on the X axix and B on
A=0 in the constraint equation to find the
g B=0 in the equations to find the value of A
he graph will be as follows- 90

80

70

60

50 contraint 1
constraint 2
40
constraint 3
30

20
the others contraint line if it is
ontraint 2,
10

0
-20 0 20 40 60 80 100

C) Lets assume Profit is P

So, 2A+3B=P
3B= P - 2A
D = -(2/3)A+(1/3)P

The coefficient of A, -2/3, is the slope of the line, and the term 1⁄3 P is the B intercept
The slope (-2⁄3) is the same for each profit line because the profit lines are parallel
When the profit line is moved further from the origin, the optimum solution point is the
intersection of constraint lines- 1 & 3
 The euation is
5A+5B <= 400 for contraint 1
1A+3B >= 90 for constraint 3

After solving the equation to find the value of A and B

A = 75 B=5

Optimal Extreme point is is A = 75, B = 5

Optimum solution is = 2*75+3*5

165

D)

From the above solution and graph, we can say that, Constraint 1 and constraint 3 bind the the
feasible region at this point because they have utilized all the values of their capacity and they
will have zero slack.

E)

The non binding constraint is Constraint 2 because It has some unused time
or slack for operations.

Slack for contraint 2 is 10, althoughafter putting extreme point on the

contraint 2 the value is -70 which is less than 10 but it is negative value
which is not valid according to the equation A.B>=0. So, the positive
unused time is 10 which is slack period.
 contraint 1
constraint 2
constraint 3

100

lution point is the

straint 3 bind the the
eir capacity and they