Situational Cases 1. A company is manufacturing two products, A and B.

The manufacturing
time required making them, the profit, and capacity available at each work centre are as follows: Product A B Work Centre Profit per unit Machining Fabrication Assembly (Rs) 1 hr 5 hrs 3 hrs 80 2 hrs 4 hrs 1 hr 100 1,800 hrs 900 hrs

Total Capacity 720 hrs

If X1 and X2 represent the number of units of product A and B, respectively, while S1, S2 and S3 represent the slack variables including the unused capacity in the three work center, we can state the problem as follows: Maximize Profit = 80X1 + 100X2 + 0S1 + 0S2 + 0S3 Subject to X1 + 2X2 + S1 = 720 5X1 + 4X2 + S2 = 1,800 3X1 + X2 + S3 = 900 X1 , X2 , S 1 , S 2 , S 3 0 The simplex algorithm, applied to this problem, yields the following final tableau: BV X2 X1 S3 Cj Zj CB 100 80 0 X1 0 1 0 0 X1 1 0 0 0 S1 5/6 -2/3 7/6 -30 S2 -1/6 1/3 -5/6 -10 S3 0 0 1 0 Sol 300 120 240

(a) Identify the values of all the variables and the objective function for the optimal solution to the primal problem (b) Formulate the dual for this problem
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(c) Identify the values of all variables and the objective function for the solution to the dual (d) Provide an economic interpretation of the dual (e) Suppose that the cost of overtime in each of the departments is Rs 15 per hour. Would it be advisable to work either of the departments on an overtime basis? What would be the maximum amount of overtime authorized, if any? (f) How would your answer in (e) change if the overtime costs were Rs. 8 instead? (g) The company is planning to introduce a new product C with the following requirements per unit: Machining: 2 hrs; Fabrication: 3 hrs; Assembly: 2 hrs What profit would be necessary before the company considers the production of this new product?

2. Given below is the simplex tableau for a maximization type of linear

programming problem: BV X2 S2 Cj Zj CB 4 0 X1 1 1 -1 X1 1 0 0 S1 1 -1 -4 S2 0 1 0 Sol 6 2

Answer the following: (a) Does the tableau represent the optimal solution? (b) Are there more than one optimal solution? (c) Is this solution degenerate?
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(d) Is this solution feasible? (e) If S1 is slack in machine A (in hrs/week) and S2 in machine B (in hrs/week), which of these machines is used to the full capacity when producing according to this solution? (f) A customer would like to have one unit of product X1 and is willing to pay in excess of the normal price in order to get it. How much should the price be increase to ensure no reduction in profit? (g) How many units of the two products X1 and X2 are being produced according to this solution and what is the total profit? (h) Machine A (associated with slack S1, in hours/week) has to be shut down for repairs for 2 hours next week. How much will the reduction in profits be? (i) What is the maximum you would be prepared to pay for another hour (per week) of capacity each on machine A and B? (j) What are the shadow prices of the machine hours?