HARAMBE UNIVERSITY

SCHOOL OF POST GRADUATE ADAMA CAMPOSE QUANTITATIVE ANALYSIS

DECISION THEORY D PROJECT RISK

Group Assignment I

Group Members
Degafe Getachew 222970/15
Eyob yohannes 222996/15
Gossa Tedla 223031/15
Yemarshet Wendimu 223459/15
Tigist Wubshet 223342/15

DECEMBER 2, 2023
HARAMBEE UNIVERSITY
Adama, Ethiopia
1 Decision theory d project risk

QUESTION 1: Discuss areas where LPM could be applicable in Ethiopian context and
how?
In the realm of operations research, optimal solutions are sought through the application of linear
programming. This powerful technique enables researchers to find the most cost-effective solution
to a problem while adhering to all its constraints. Linear programming finds widespread use across
various domains, enhancing process efficiency in fields such as:Linear programming techniques
are widely used in many fields to improve the efficiency of their processes. Food and agriculture,
engineering, transportation, manufacturing, and energy are a few of these.

Transportation Optimization
Linear programming aids in optimizing transportation routes, minimizing costs, and ensuring
efficient logistics.Linear programming optimization reduces costs and boosts airline productivity.
Routes for buses and trains must take passengers, travel time, and scheduling into account. In order
to maximize their profits based on varying seat prices and customer demand, airlines employ linear
programming. Linear programming is also used by airlines for route and pilot scheduling

Food and Agriculture

Farmers employ linear programming techniques to optimize crop selection, quantity, and resource
utilization, thereby increasing revenue. Additionally, nutritionists leverage linear programming to
design healthy, low-cost food baskets for needy families, considering dietary guidelines and cultural
acceptability.Constraints may include dietary guidelines, nutrient guidance, cultural acceptability or
some combination thereof. Mathematical modeling provides assistance to calculate the foods needed
to provide nutrition at low cost, in order to prevent noncommunicable disease. Unprocessed food
data and prices are needed for such calculations, all while respecting the cultural aspects of the food
types. The objective function is the total cost of the food basket. Linear programming also allows
time variations for the frequency of making such food baskets.

Applications in Engineering
Engineers also use linear programming to help solve design and manufacturing problems. For
example, in airfoil meshes, engineers seek aerodynamic shape optimization. This allows for the
reduction of the drag coefficient of the airfoil. Constraints may include lift coefficient, relative
maximum thickness, nose radius and trailing edge angle. Shape optimization seeks to make a shock-
free airfoil with a feasible shape. Linear programming therefore provides engineers with an essential
tool in shape optimization.

Efficient Manufacturing

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2 Decision theory d project risk

Manufacturers use linear programming to streamline production processes, allocate resources

effectively, and minimize costs.To maximize business revenue, products must be created from raw
materials in the manufacturing process. To accomplish that, every stage of the manufacturing
process needs to function well. In an assembly line, for instance, raw materials have to pass through
a series of machines for predetermined periods of time. A business can use a linear expression to
determine how much raw material to use in order to maximize profit. The amount of time spent on
each machine is one constraint. Machines that are causing bottlenecks need to be fixed. Depending
on the cost of raw materials and production time, the quantity of products produced may change in
an effort to maximize profit.

Energy Industry
Linear programming plays a crucial role in energy resource allocation, production planning, and
cost optimization.Modern energy grid systems incorporate not only traditional electrical systems,
but also renewables such as wind and solar photovoltaics. In order to optimize the electric load
requirements, generators, transmission and distribution lines, and storage must be taken into
account. At the same time, costs must remain sustainable for profits. Linear programming provides
a method to optimize the electric power system design. It allows for matching the electric load in
the shortest total distance between generation of the electricity and its demand over time. Linear
programming can be used to optimize load-matching or to optimize cost, providing a valuable tool
to the energy industry.

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3 Decision theory d project risk

QUESTION 2:

𝑍𝑚𝑖𝑛 = 1600𝑥 + 2400𝑦

Subjected to
4𝑥 + 𝑦 ≥ 24
2𝑥 + 3𝑦 ≥ 42
𝑥 + 4𝑦 ≥ 36
𝑥 ≤ 14
𝑦 ≤ 14
𝑥, 𝑦 ≥ 0
A. Solve this LP problem using both graphic and simplex method (Show all steps).
I. Using graphic method

Steps
a. Plot each of the constraints by finding its coordinates.
Find coordinates for each constraint
Convert constraints inequalities into equalities and determine the coordinates
Constraint X Y intercepts (X, Y)
4𝑥 + 𝑦 = 24 0 4 ∗ 0 + 𝑦 = 24 (0,24)
Y=24
4𝑥 + 0 = 24 0
(6,0)
X=6
2𝑥 + 3𝑦 = 42 0 2 ∗ 0 + 3𝑦 = 42 (0,14)
Y=14
2𝑥 + 3 ∗ 0 = 42 0
(21,0)
X=21
𝑥 + 4𝑦 = 36 0 0 + 4𝑦 = 36 (0,9)
Y=9
𝑥 + 4 ∗ 0 = 36 0
(36,0)
X=36
𝑥 = 14 14 0 (14,0)
𝑦 = 14 0 14 (0,14)
Plot the graph

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4 Decision theory d project risk

b. Determine the feasible region for each constraint

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5 Decision theory d project risk

c. Determine the region or area that contains all of the points that satisfy the entire set of
constraints.
The points between corner points of A (3, 12) and E (12, 6) satisfy the entire set of constraints
d. Determine the optimal solution.
Corner Points Intercepts 𝑍𝑚𝑖𝑛 = 1600𝑥 + 2400𝑦
A 3,12 𝑍𝑚𝑖𝑛 = 1600 ∗ 3 + 2400 ∗ 12 33,600
B 2.5,14 𝑍𝑚𝑖𝑛 = 1600 ∗ 2.5 + 2400 ∗ 14 37,600
C 14,14 𝑍𝑚𝑖𝑛 = 1600 ∗ 14 + 2400 ∗ 14 56,000
D 14,5.5 𝑍𝑚𝑖𝑛 = 1600 ∗ 14 + 2400 ∗ 5.5 35,600
E 12,6 𝑍𝑚𝑖𝑛 = 1600 ∗ 12 + 2400 ∗ 6 33,600
The Z value is minimum for the corner points of A (3, 12) and E (12, 6)
X=3 ,Y=12
𝑍𝑂𝑝𝑡𝑖𝑚𝑢𝑚 = 1600 ∗ 3 + 2400 ∗ 12
𝑍𝑂𝑝𝑡𝑖𝑚𝑢𝑚 = 33,600

II. Using simplex method

Steps

A. Standardization of a given model

Equalization /balancing left hand side with right hand side

For equations with≥ we add a negatve slack and artificial variable
For equations with≤we add a positive slack
Hence,
𝑍𝑚𝑖𝑛 = 1600𝑥 + 2400𝑦 + 0𝑆1 + 0𝑆2 + 0𝑆3 + 0𝑆4 + 0𝑆5 + 𝑀𝐴1 + 𝑀𝐴2 + 𝑀𝐴3
Subjected to
4𝑥 + 𝑦 − 𝑆1 + 𝐴1 + 0𝑆2 + 0𝐴2 + 0𝑆3 + 0𝐴3 + 0𝑆4 + 0𝑆5 = 24
2𝑥 + 3𝑦 + 0𝑆1 + 0𝐴1 − 𝑆2 + 𝐴2 + 0𝑆3 + 0𝐴3 + 0𝑆4 + 0𝑆5 = 42

𝑥 + 4𝑦 + 0𝑆1 + 0𝐴1 + 0𝑆2 + 0𝐴2 − 𝑆3 + 𝐴3 + 0𝑆4 + 0𝑆5 = 36

𝑥 + 0𝑦 + 0𝑆1 + 0𝐴1 + 0𝑆2 + 0𝐴2 + 0𝑆3 + 0𝐴3 + 𝑆4 + 0𝑆5 = 14
0𝑥 + 𝑦 + 0𝑆1 + 0𝐴1 + 0𝑆2 + 0𝐴2 + 0𝑆3 + 0𝐴3 + 0𝑆4 + 𝑆5 = 14
𝑥, 𝑦, 𝑆1 , 𝑆2 , 𝑆3 , 𝑆4 , 𝑆5 , 𝐴1 , 𝐴2 , 𝐴3 ≥ 0

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6 Decision theory d project risk

B. Develop initial Simplex table

𝐵𝑉 𝐶𝑗 𝑋 𝑌 𝑆1 𝑆2 𝑆3 𝑆4 𝑆5 𝐴1 𝐴2 𝐴3 𝑏𝑗
1600 2400 0 0 0 0 0 M M M
𝐴1 M 4 1 -1 0 0 0 0 1 0 0 24
𝐴2 M 2 3 0 -1 0 0 0 0 1 0 42
𝐴3 M 1 4 0 0 -1 0 0 0 0 1 36
𝑆4 0 1 0 0 0 0 1 0 0 0 0 14
𝑆5 0 0 1 0 0 0 0 1 0 0 0 14
𝑍𝑗 7M 8M -M -M -M 0 0 M M M
𝐶𝐽 − 𝑍𝑗 1600-7M 2400-8M M M M 0 0 0 0 0
To find 𝒁𝒋 and 𝑪𝑱 − 𝒁𝒋

Column 𝑍𝑗 Result 𝐶𝐽 𝐶𝐽 − 𝑍𝑗
Column 1 𝑍1 = 𝑀 ∗ 4 + 𝑀 ∗ 2 + 𝑀 ∗ 1 + 0 ∗ 1 + 0 ∗ 0 7𝑀 1600 1600-7M
Column 2 𝑍2 = 𝑀 ∗ 1 + 𝑀 ∗ 3 + 𝑀 ∗ 4 + 0 ∗ 0 + 0 ∗ 1 8𝑀 2400 2400-8M
Column 3 𝑍3 = 𝑀 ∗ −1 + 𝑀 ∗ 0 + 𝑀 ∗ 0 + 0 ∗ 0 + 0 ∗ 0 −𝑀 0 M
Column 4 𝑍4 = 𝑀 ∗ 0 + 𝑀 ∗ −1 + 𝑀 ∗ 0 + 0 ∗ 0 + 0 ∗ 0 −𝑀 0 M
Column 5 𝑍5 = 𝑀 ∗ 0 + 𝑀 ∗ 0 + 𝑀 ∗ −1 + 0 ∗ 0 + 0 ∗ 0 −𝑀 0 M
Column 6 𝑍6 = 𝑀 ∗ 0 + 𝑀 ∗ 0 + 𝑀 ∗ 0 + 0 ∗ 1 + 0 ∗ 0 0 0 0
Column 6 𝑍6 = 𝑀 ∗ 0 + 𝑀 ∗ 0 + 𝑀 ∗ 0 + 0 ∗ 0 + 0 ∗ 1 0 0 0
Column 7 𝑍7 = 𝑀 ∗ 1 + 𝑀 ∗ 0 + 𝑀 ∗ 0 + 0 ∗ 0 + 0 ∗ 0 𝑀 M 0
Column 8 𝑍8 = 𝑀 ∗ 0 + 𝑀 ∗ 1 + 𝑀 ∗ 0 + 0 ∗ 0 + 0 ∗ 0 𝑀 M 0
Column 9 𝑍9 = 𝑀 ∗ 0 + 𝑀 ∗ 0 + 𝑀 ∗ 1 + 0 ∗ 0 + 0 ∗ 0 𝑀 M 0

C. Check for Optimality

Minimization problem is optimal when 𝐶𝐽 − 𝑍𝑗 ≥ 0

𝒔𝒊𝒏𝒄𝒆 𝒕𝒉𝒆𝒓𝒆 𝒂𝒓𝒆 𝒕𝒘𝒐 𝒗𝒂𝒍𝒆𝒔 𝒘𝒉𝒆𝒓𝒆 𝑪𝑱 − 𝒁𝒋 ≤ 𝟎 𝒕𝒉𝒆 𝒐𝒑𝒕𝒊𝒎𝒂𝒍𝒊𝒕𝒚 𝒊𝒔 𝒏𝒐𝒕 𝒂𝒄𝒉𝒊𝒆𝒗𝒆𝒅.
Therefore, there is a possibility for improvement

D. Entering Variable determination

A variable with largest negative 𝐶𝐽 − 𝑍𝑗 value furthest from zero is the entering variable

In this case 𝐶𝐽 − 𝑍𝑗 vale furthest from zero is 2400-8M, the entering variable is Y

𝑅𝑅
𝑋 𝑌 𝑆1 𝑆2 𝑆3 𝑆4 𝑆5 𝐴1 𝐴2 𝐴3 𝑏𝑖
𝐵𝑉 𝐶𝑗 𝑏𝑗 =
1600 2400 0 0 0 0 0 M M M 𝑎𝑖𝑗 𝑜𝑓 𝑐𝑜𝑟𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑖𝑛𝑔
𝑝𝑖𝑣𝑜𝑡 𝑐𝑜𝑙𝑢𝑚𝑛
24
𝐴1 M 4 1 -1 0 0 0 0 1 0 0 24 =24 𝑅𝑅1
1

Pivot Column

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7 Decision theory d project risk

42
𝐴2 M 2 3 0 -1 0 0 0 0 1 0 42 = 14 𝑅𝑅2
3
36
𝐴3 M 1 4 0 0 -1 0 0 0 0 1 36 = 9 𝑅𝑅3
4
𝑆4 0 1 0 0 0 0 1 0 0 0 0 14 − 𝑅𝑅4
14
𝑆5 0 0 1 0 0 0 0 1 0 0 0 14 = 14 𝑅𝑅5
1
𝑍𝑗 7M 8M -M -M -M 0 0 M M M
𝐶𝐽 − 𝑍𝑗 1600-7M 2400-8M M M M 0 0 0 0 0

Pivot Row

E. Leaving variable determination

A variable with least positive replacement ratio will be the leaving variable. In this case the positive
RR value is 9. Hence 𝑨𝟑 leaving variable.

F. Develop new simplex table

To develop new simplex table first it is needed to change the pivot element into unit.
1 𝑅𝑅1 =𝑅𝑅1 − 𝑅𝑅3 𝑅𝑅2 = 𝑅𝑅2 − 3𝑅𝑅3 𝑅𝑅4 = 𝑅𝑅4 𝑅𝑅5 = 𝑅𝑅5 -
𝑅𝑅3 = 𝑅𝑅3
4
𝑅𝑅3
1 1 1 15 1 5 1 1 −1
∗1= 4− = 2 − (3 ∗ ) = 0− =
4 4 4 4 4 4 4 4
1 1−1=0 3 − (3 ∗ 1) = 0 0 1−1= 0
∗4= 1
4
1 −1 − 0 = −1 0 − (3 ∗ 0) = 0 0 0−0= 0
∗0= 0
4
1 0−0=0 −1 − (3 ∗ 0) = −1 0 0−0= 0
∗0= 0
4
1 1 −1 1 1 1 0 −1 1
∗ −1 = − 0− = 0 − (3 ∗ ) = 0− =
4 4 4 4 4 4 4 4
1 0−0=0 0 − (3 ∗ 0) = 0 1 0−0= 0
∗0= 0
4
1 0−0=0 0 − (3 ∗ 0) = 0 0 1−0= 1
∗0= 0
4
1 1−0=1 0 − (3 ∗ 0) = 0 0 0−0= 0
∗0= 0
4
1 0−0=0 1 − (3 ∗ 0) = 1 0 0−0= 0
∗0= 0
4
1 24 − 9 = 15 2 − (3 ∗ 9) = 15 9 14 − 9 = 5
∗ 36 = 9
4

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8 Decision theory d project risk

Then develop the new simplex table

𝐵𝑉 𝐶𝑗 𝑋 𝑌 𝑆1 𝑆2 𝑆3 𝑆4 𝑆5 𝐴1 𝐴2 𝑏𝑗
1600 2400 0 0 0 0 0 M M

𝐴1 M 15 0 -1 0 1 0 0 1 0 15
4 4
𝐴2 M 5 0 0 -1 1 0 0 0 0 15
4 4
𝑌 2400 1 1 0 0 −1 0 0 0 0 9
4 4
𝑆4 0 1 0 0 0 0 0 1 0 0 14
𝑆5 0 −1 0 0 0 1 0 1 0 0 5
4 4
𝑍𝑗 600+5M 2400 -M -M M-600 0 0 M M
1
𝐶𝐽 − 𝑍𝑗 1000-5M 0 M M 600-2 𝑀 0 0 0 0

Check for Optimality

𝒔𝒊𝒏𝒄𝒆 𝒕𝒉𝒆𝒓𝒆 𝒂𝒓𝒆 𝒕𝒘𝒐 𝒗𝒂𝒍𝒆𝒔 𝒘𝒉𝒆𝒓𝒆 𝑪𝑱 − 𝒁𝒋 ≤ 𝟎 𝒕𝒉𝒆 𝒐𝒑𝒕𝒊𝒎𝒂𝒍𝒊𝒕𝒚 𝒊𝒔 𝒏𝒐𝒕 𝒂𝒄𝒉𝒊𝒆𝒗𝒆𝒅.
Therefore, there is a possibility for improvement

Entering Variable determination

In this case 𝐶𝐽 − 𝑍𝑗 vale furthest from zero is 1000-5M, the entering variable is X

𝐵𝑉 𝐶𝑗 𝑋 𝑌 𝑆1 𝑆2 𝑆3 𝑆4 𝑆5 𝐴1 𝐴2 𝑏𝑗 𝑅𝑅
160 2400 0 0 0 0 0 M M 𝑏𝑖
=
0 𝑎𝑖𝑗 𝑜𝑓 𝑐𝑜𝑟𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑖𝑛𝑔
𝑝𝑖𝑣𝑜𝑡 𝑐𝑜𝑙𝑢𝑚𝑛
𝐴1 M 15 0 -1 0 1 0 0 1 0 15 15
=4 𝑅𝑅1
15
4 4 4
𝐴2 M 5 0 0 -1 1 0 0 0 0 15 15
= 12 𝑅𝑅2
5
4 4 4
1 −1 9
𝑌 2400 1 0 0 0 0 0 0 9 1 = 36 𝑅𝑅3
4 4 4
𝑆4 0 1 0 0 0 0 0 1 0 0 14 − 𝑅𝑅4
−1 1 14
𝑆5 0 0 0 0 0 1 0 0 5 = 14 𝑅𝑅5
1
4 4
𝑍𝑗 600 2400 -M -M M- 0 0 M M
+5M 60
0
𝐶𝐽 − 𝑍𝑗 100 0 M M 60 0 0 0 0
0- 0-
5M 1
𝑀
2

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9 Decision theory d project risk

Leaving variable determination

A variable with least positive replacement ratio will be the leaving variable. In this case the positive
RR value is 4. Hence 𝑨𝟏 leaving variable

Develop new simplex table

Following the same procedure as the previous developed simplex table to find the RR value
4 5 1 1
𝑅𝑅1 =15 𝑅𝑅1 𝑅𝑅2 = 𝑅𝑅2 − 𝑅𝑅1 𝑅𝑅3 = 𝑅𝑅3 − 4 𝑅𝑅1 𝑅𝑅4 = 𝑅𝑅4 − 𝑅𝑅1 𝑅𝑅5 = 𝑅𝑅5 + 4-𝑅𝑅1
4
1 0 0 0 0
0 0 1 0 0
-4/5 1/3 1/15 4/15 1/15
0 -1 0 0 0
1/15 1/6 -4/15 -1/15 1/15
0 0 0 0 0
0 0 0 1 1
0 -1 0 0 0
4 10 8 10 6

The new simplex table is

𝐵𝑉 𝐶𝑗 𝑋 𝑌 𝑆1 𝑆2 𝑆3 𝑆4 𝑆5 𝐴2 𝑏𝑗
1600 2400 0 0 0 0 0 M
𝑋 1600 1 0 4 0 1 0 0 0 4
−
5 15
𝐴2 M 0 0 1 -1 1 0 0 1 10
3 6
𝑌 2400 0 1 1 0 −4 0 0 0 8
15 15
𝑆4 0 0 0 4 0 −1 0 1 0 10
15 15
𝑆5 0 0 0 1 0 1 0 1 0 6
15 15
𝑍𝑗 1600 2400 𝑀 -M 𝑀 1600 0 0 M
− 800 −
3 6 3
𝐶𝐽 − 𝑍𝑗 0 0 800 𝑀 M 1600 𝑀 0 0 0
− −
3 3 3 6

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10 Decision theory d project risk

Check for Optimality

𝒔𝒊𝒏𝒄𝒆 𝒕𝒉𝒆𝒓𝒆 𝒂𝒓𝒆 𝒕𝒘𝒐 𝒗𝒂𝒍𝒆𝒔 𝒘𝒉𝒆𝒓𝒆 𝑪𝑱 − 𝒁𝒋 ≤ 𝟎 𝒕𝒉𝒆 𝒐𝒑𝒕𝒊𝒎𝒂𝒍𝒊𝒕𝒚 𝒊𝒔 𝒏𝒐𝒕 𝒂𝒄𝒉𝒊𝒆𝒗𝒆𝒅.
Therefore, there is a possibility for improvement

Entering Variable determination

800 𝑀
In this case 𝐶𝐽 − 𝑍𝑗 vale furthest from zero is − 3 , the entering variable is 𝑺𝟏
3

𝐵𝑉 𝐶𝑗 𝑋 𝑌 𝑆1 𝑆2 𝑆3 𝑆4 𝑆5 𝐴2 𝑏𝑗 𝑅𝑅
1600 2400 0 0 0 0 0 M 𝑏𝑖
=
𝑎𝑖𝑗 𝑜𝑓 𝑐𝑜𝑟𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑖𝑛𝑔
𝑝𝑖𝑣𝑜𝑡 𝑐𝑜𝑙𝑢𝑚𝑛
𝑋 1600 1 0 4 0 1 0 0 0 4 − 𝑅𝑅1
−
5 15
1 1 10
𝐴2 M 0 0 -1 0 0 1 10 1 = 30 𝑅𝑅2
3 6 3
1 −4 8
𝑌 2400 0 1 0 0 0 0 8 1 = 120 𝑅𝑅3
15 15 15
𝑆4 0 0 0 4 0 −1 0 1 0 10 10 150
= 𝑅𝑅4
15 15 4 4
15
1 1 6
𝑆5 0 0 0 0 0 1 0 6 1 = 90 𝑅𝑅5
15 15 15
𝑍𝑗 1600 2400 𝑀 -M 𝑀 1600 0 0 M
− 800 −
3 6 3
𝐶𝐽 − 𝑍𝑗 0 0 800 𝑀 M 1600 𝑀 0 0 0
− −
3 3 3 6

Leaving variable determination

A variable with least positive replacement ratio will be the leaving variable. In this case the positive
RR value is 4. Hence 𝑨𝟐 leaving variable

Develop new simplex table

Following the same procedure as the previous developed simplex table

4 1 4 1
𝑅𝑅2 = 3𝑅𝑅2 𝑅𝑅1 =𝑅𝑅1 + 15 𝑅𝑅1 𝑅𝑅3 = 𝑅𝑅3 − 15 𝑅𝑅1 𝑅𝑅4 = 𝑅𝑅4 − 15 𝑅𝑅1 𝑅𝑅5 = 𝑅𝑅5 -15 𝑅𝑅1
1 0 0 0 0
0 0 1 0 0
0 1 0 0 0
-4/5 -3 1/5 4/5 1/5
1/5 ½ -3/10 -1/5 7/30
0 0 0 0 0
0 0 0 1 0
12 30 6 2 4

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11 Decision theory d project risk
𝐵𝑉 𝐶𝑗 𝑋 𝑌 𝑆1 𝑆2 𝑆3 𝑆4 𝑆5 𝑏𝑗
160 240 0 0 0 0 0
The new simplex table is 0 0
𝑋 160 1 0 0 −4 1 0 0 12
Check for Optimality 0 5 5
𝑆1 0 0 0 1 −3 1 0 0 30
Minimization problem is optimal 2
when 𝐶𝐽 − 𝑍𝑗 ≥ 0 𝑌 240 0 1 0 1 −3 0 0 6
0 5 10
𝒔𝒊𝒏𝒄𝒆 𝒕𝒉𝒆 𝒗𝒂𝒍𝒖𝒆 𝒐𝒇 𝑪𝑱 − 𝒁𝒋 ≥ 𝑆4 0 0 0 0 4 −1 0 1 2
𝟎 𝒕𝒉𝒆 𝒐𝒑𝒕𝒊𝒎𝒂𝒍𝒊𝒕𝒚 𝒊𝒔 𝒂𝒄𝒉𝒊𝒆𝒗𝒆𝒅. 5 5
𝑆5 0 0 0 0 1 7 0 1 4
Optimal solution
5 30
X=12 and Y=6 𝑍𝑗 160 240 0 -800 -400 0 0
0 0
Hence, 𝒁𝒎𝒊𝒏 = 𝟏𝟔𝟎𝟎𝒙 + 𝐶𝐽 − 𝑍𝑗 0 0 0 800 400 0 0
𝟐𝟒𝟎𝟎𝒚
𝒁𝒎𝒊𝒏 = 𝟏𝟔𝟎𝟎(𝟏𝟐) + 𝟐𝟒𝟎𝟎(𝟔)
𝒁𝒎𝒊𝒏 = 𝟑𝟑𝟔𝟎𝟎

b. Is there alternative solution? If so, identify at least, four integer alternative solutions.

There are alternative solutions. The points between corner points A and E are alternative solutions

c. Solve using excel solver and write the summary of both answer and sensitivity report.
Steps
1. Feeding of the formulated data

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2. Set Requirements and Solve

3. Output and report

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4.

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Summary Report
Range of Feasibility
Const. Allowable Increase Allowable Decrease Range of Feasibility
1 24 + 30 = 54 24 − 20 = 14 14 ≤ 24 ≤ 54
2 42 + 5 = 47 42 − 10 = 32 32 ≤ 42 ≤ 47
3 36 − 1𝐸 + 30 = −1𝐸 −1𝐸 + 30 ≤ 36 ≤ 51
36 + 15 = 51
+ 30
4 14 − 11 = 3 3 ≤ 1𝐸 + 30 ≤ 14
14 + 1𝐸 + 30 = 1𝐸 + 30 + 1𝐸
+ 30
5 14 + 1𝐸 + 30 = 1𝐸 + 30 14 − 2 = 12 2.5 ≤ 7 ≤ 1𝐸 + 30

Range of optimality
Optimal Range of optimality
variable coeff.
X 1600 − 0 ≤ 𝑋 ≤ 2400 + 8000 1600 ≤ 𝑋 ≤ 10400
Y 2400 − 20000 ≤ 𝑌 ≤ 2400 + 0 −18000 ≤ 𝑌 ≤ 2400

QUESTION 3: The manager of a department store in Adama is attempting to decide on

the types and amounts of advertising the store should use. He has invited representatives
from the local radio station, television station, and newspaper to make presentations in
which they describe their audiences.
a. The television station representative indicates that a TV commercial, which costs Birr 15,000,
would reach 25,000 potential customers. The breakdown of the audience is as follows.
Male Female
Old 5,000 5,000
Young 5,000 10,000

b. The newspaper representative claims to be able to provide an audience of 10,000 potential

customers at a cost of Birr 4000 per ad. The breakdown of the audience is as follows.
Male Female
Old 4,000 3,000
Young 2,000 1,000

c. The radio station representative says that the audience for one of the station’s commercials,
which costs Birr 6000, is 15,000 customers. The breakdown of the audience is as follows.
Male Female
Old 1,500 1,500
Young 4,500 7,500

The store has the following advertising policy:

a. Use at least twice as many radio commercials as newspaper ads.
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b. Reach at least 100,000 customers

c. Reach at least twice as many young people as old people
d. Make sure that at least 30% of the audience is women.
Available space limits the number newspaper ads to 7. The store wants to know the optimal number
of each type of advertising to purchase to minimize total cost.
Required:
a. Formulate appropriate linear programming model, standardize the model and develop initial
simplex table for the problem
b. solve using excel solver and prepare a summary report.
c. Find the range of feasibility for all constraints and optimality for decision variables. Determine
range of insignificance, if any
d. Convert the primal in to dual and solve it using excel solver and compare the results with that
of primal
Solution
a. Formulation, Standardization, Develop simplex table
Formulation
Let 𝑋1 be television commercial by the department store
𝑋2 be newspaper commercial
𝑋3 be radio commercial
Objective function
𝑍𝑚𝑖𝑛 = 15000𝑥1 + 4000𝑥2 + 6000𝑥3
Subjected to
a. At least twice of radio commercial as newspaper ads
𝑋3 ≥ 2𝑋2 or 𝑋3 − 2𝑋2 ≥ 0
b. Total audiences reach at least 100000 customers
25000𝑋1 + 10000𝑋2 + 15000𝑋3 ≥ 100000
c. The store should reach twice of young audiences as old audiences
−5000𝑋1 − 11000𝑋2 + 6000𝑋3 ≥ 0
d. the store should target at least 30% women audiences
0.3(25000𝑋1 + 10000𝑋2 + 15000𝑋3 )
7500𝑋1 + 3000𝑋2 + 4500𝑋3 ≥ 0
e. the space limits the number newspapers ads to 7
𝑋2 ≤ 7
𝑋1 , 𝑋2, 𝑋3 ≥ 0

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Using the equations formulate the linear programming model

𝑋3 − 2𝑋2 ≥ 0
25000𝑋1 + 10000𝑋2 + 15000𝑋3 ≥ 100000
−5000𝑋1 − 11000𝑋2 + 6000𝑋3 ≥ 0
7500𝑋1 + 1000𝑋2 + 4500𝑋3 ≥ 0
𝑋2 ≤ 7
𝑋1 , 𝑋2, 𝑋3 ≥ 0
Standardization
𝑍𝑚𝑖𝑛 = 15000𝑥1 + 4000𝑥2 + 6000𝑥3 + 0𝑆1 + 0𝑆2 + 0𝑆3 + 0𝑆4 + 0𝑆5 + 𝑀𝐴1 + 𝑀𝐴2+ 𝑀𝐴3
+ 𝑀𝐴4
Subjected to
0𝑥1 − 2𝑥2 + 𝑥3 + 𝑆1 + 0𝑆2 + 0𝑆3 + 0𝑆4 + 0𝑆5 + 𝐴1 + 0𝐴2 + 0𝐴3 + 0𝐴4 = 0
25000𝑥1 + 10000𝑥2 + 15000𝑥3 + 0𝑆1 − 𝑆2 + 0𝑆3 + 0𝑆4 + 0𝑆5 + 0𝐴1 + 𝐴2 + 0𝐴3 + 0𝐴4
= 100000
−5000𝑥1 − 11000𝑥2 + 6000𝑥3 + 0𝑆1 + 0𝑆2 − 𝑆3 + 0𝑆4 + 0𝑆5 + 0𝐴1 + 0𝐴2 + 𝐴3 + 0𝐴4 = 0
7500𝑥1 + 1000𝑥2 + 4500𝑥3 + 0𝑆1 + 0𝑆2 + 0𝑆3 − 𝑆4 + 0𝑆5 + 0𝐴1 + 0𝐴2 + 0𝐴3 + 𝐴4 = 0
0𝑥1 + 𝑥2 + 0𝑥3 + 0𝑆1 + 0𝑆2 + 0𝑆3 + 0𝑆4 + 0𝑆5 + 0𝐴1 + 0𝐴2+ 0𝐴3 + 0𝐴4 = 0
𝑥1 , 𝑥2 , 𝑥3 , 𝑆1 , 𝑆2 , 𝑆3 , 𝑆4 , 𝑆5 , 𝐴1 , 𝐴2 , 𝐴3 , 𝐴4 ≥ 0
Develop Simplex table
𝐵𝑉 𝐶𝑗 𝑋1 𝑋2 𝑋3 𝑆1 𝑆2 𝑆3 𝑆4 𝑆5 𝐴1 𝐴2 𝐴3 𝐴4 𝑏𝑗
15000 4000 6000 0 0 0 0 0 M M M M
𝐴1 M 0 -2 1 -1 0 0 0 0 1 0 0 0 0
𝐴2 M 25000 10000 1500 0 -1 0 0 0 0 1 0 0 100
0 000
𝐴3 M -5000 -11000 6000 0 0 -1 0 0 0 0 1 0 0
𝐴4 M 7500 1000 4500 0 0 0 -1 0 0 0 0 1 0
𝑆5 0 0 1 0 0 0 0 0 1 0 0 0 0 7
𝑍𝑗 27500M -2M 2550 -M -M 0 0 0 M M M M
1M
𝐶𝐽 − 𝑍𝑗 15000- 4000-2M 6000- M M M 0 0 0 0 0 0
27500M 2550
1M

b. Solve using excel solver and prepare a summary report

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Steps
1. Feeding of the formulated data

2. Set Requirements and Solve

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3. Output and report

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c. Find the range of feasibility for all constraints and optimality for decision variables. Determine
range of insignificance, if any
Range of Feasibility
Const. Allowable Increase Allowable Decrease Range of Feasibility
1 0 + |−6.6667| = 6.6667 0 − 0.444 = −0.444 −0.444 ≤ 0 ≤ 6.6667
2 100000 + |−180000| = 280000 100000 − 100000 = 0 0 ≤ 100000 ≤ 280000
3 0 + |−2500| = 2500 0 − 1𝐸 + 30 = −1𝐸 + 30 −1𝐸 + 30 ≤ 0 ≤ 2500
4 0 + |−25000| = 25000 0 − 1𝐸 + 30 = −1𝐸 + 30 −1𝐸 + 30 ≤ 25000
5 7 + |−1𝐸 + 30| = 1𝐸 + 30 7 − 4.5 = 2.5 2.5 ≤ 7 ≤ 1𝐸 + 30

Range of optimality
Optimal Range of optimality
variable coeff.
𝑋1 15000 − 5000 ≤ 𝑋1 ≤ 15000 + 1𝐸 + 30 10000 ≤ 𝑋1 ≤ 1𝐸 + 30
𝑋2 4000 − 16000 ≤ 𝑋2 ≤ 4000 + 0 −12000 ≤ 𝑋2 ≤ 4000
𝑋3 6000 + 0 ≤ 𝑋3 ≤ 6000 + 4000 6000 ≤ 𝑋3 ≤ 10000

d. Convert the primal in to dual and solve it using excel solver and compare the results with that
of primal
The dual form of the primal is formulated as
𝑍𝑚𝑖𝑛 = 15000𝑥1 + 4000𝑥2 + 6000𝑥3
S.T.
𝑋3 − 2𝑋2 ≥ 0
25000𝑋1 + 10000𝑋2 + 15000𝑋3 ≥ 100000
−5000𝑋1 − 11000𝑋2 + 6000𝑋3 ≥ 0
7500𝑋1 + 1000𝑋2 + 4500𝑋3 ≥ 0
𝑋2 ≤ 7
𝑋1 , 𝑋2, 𝑋3 ≥ 0

𝑍𝑚𝑎𝑥 = 10000𝑌2 + 7𝑌5

S.T.
25000𝑌2 − 5000𝑌3 + 7500𝑌5 ≤ 15000
−2𝑌1 + 10000𝑌2 − 11000𝑌3 + 1000𝑌4 + 𝑌5 ≤ 4000
𝑌1 + 15000𝑌2 + 6000𝑌3 + 4500𝑌4 ≤ 6000
𝑌𝑖 ≥ 0, 𝑖 = 1,2,3,4,5
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Solving
Steps
1. Feeding data

2. Setting requirements and solve

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3. Outputs and reports

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Comparing
The optimal solution of dual shows increment than the primal
The shadow price of dual form is greater than the primal

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