Accessories Inc

Accessories Inc manufactures belts and shoes.

A belt requires 2 square metres of leather and 1 hour of skilled labour. A pair of shoes requires 3
square metres of leather and 2 hours of skilled labour. As many as 25 square metres of leather and
15 hours of skilled labour can be purchased at a price of R5/m2 of leather and R10/hour of skilled
labour.

A belt sells for R23, and a pair of shoes sells for R40. Accessories Inc wants to maximise profits
(revenues − costs).

Formulate a mathematical model of Accessories Inc that can be used to maximise Accessories Inc
weekly profit.

1. Formulation
2. Primal Simplex

x 1=¿ belts sold

x 2=¿ shoes sold

max z=3 x 1 +5 x2

s.t.

2 x1 +3 x 2 ≤ 25

x 1+ 2 x 2 ≤15

x1 , x2 ≥ 0

X BV =
[]
x1
x2
¿
Z =40
C BV = [ 3 , 5 ]

B=
[ 21 32]
B
−1
=
[−12 −32 ]
−1
C BV . B =[ 1, 1 ]

[
b= (25+1)
15 ]
¿ −1
Z =C BV . B . b
 ¿
Z =[ 1 ,1 ] ×
[ ] 26
15
=41

¿ ¿
Shadow Price(Leather )=Z(new) −Z (old)

Shadow Price(Leather )=41−40

Shadow Price(Leather )=R 1

b=
[ 25
(15+1) ]
¿ −1
Z =C BV . B . b

¿
Z =[ 1 ,1 ] ×
[ 2516 ]=41
Shadow Price(Labour) =Z ¿(new)−Z(old)
¿

Shadow Price(Labour ) =41−40

Shadow Price(Labour ) =R 1

Premium Shadow Price(Leather )=Shadow Price(Leather ) +Cost of 1 x leather

Premium Shadow Price(Leather )=R 1+ R 5

Premium Shadow Price(Leather )=R 6

Premium Shadow Price(Labour )=Shadow Price(Labour ) +Cost of 1 x Labour

Premium Shadow Price(Labour )=R 1+ R 10

Premium Shadow Price(Labour)=R 11

Limpopo Furniture Company

The Limpopo Furniture Company manufactures desks, tables, and chairs. The manufacture of each
type of furniture requires lumber and two types of skilled labour: finishing and carpentry.

The amount of each resource needed to make each type of furniture is given in the table. Currently,
48 board metres of lumber, 20 finishing hours, and 8 carpentry hours are available. A desk sells for
R60, a table for R30, and a chair for R20. Because the available resources have already been
purchased, Limpopo wants to maximise total revenue.

Formulate a mathematical model of the Limpopo Furniture Company that can be used to maximise
profit.
¿ −1
Z =C BV . B . b

[]
49
¿
Z Shadow Price (Lumber )
=[ 0 ,10 , 10 ] × 20 =280
8
¿ ¿
Shadow Price(Lumber )=Z (new) −Z (old)

Shadow Price(Lumber )=280−28 0

Shadow Price(Lumber )=R 0

[]
48
¿
Z Shadow Price (Finishing Hours )
=[ 0 ,10 ,10 ] × 2 1 =290
8

Shadow Price(Finishing Hours)=Z ¿(new )−Z ¿(old)

Shadow Price(Finishing Hours)=29 0−280

Shadow Price(Finishing Hours)=R 1 0

 []
48
¿
Z Shadow Price (Carpentry Hours)
= [ 0 , 10 , 10 ] × 2 0 =290
9
¿ ¿
Shadow Price(CarpentryHours)=Z(new)−Z(old)

Shadow Price(CarpentryHours)=290−280

Shadow Price(CarpentryHours)=R10

No cost attached to resources, thus Shadow Prices = Premium Shadow Prices.

Santa’s Workshop

Santa’s Workshop employs elves to manufacture two types of wooden toys: soldiers and trains.

A soldier sells for R27 and uses R10 worth of raw materials. Each soldier that is manufactured
increases Santa’s variable labour and overhead costs by R14. A train sells for R21 and uses R9 worth
of raw materials. Each train built increases Santa’s variable labour and overhead costs by R10.

The manufacture of wooden soldiers and trains requires two types of skilled labour: carpentry and
finishing. A soldier requires 2 hours of finishing labour and 1 hour of carpentry labour. A train
requires 1 hour of finishing and 1 hour of carpentry labour. Each week, Santa can obtain all the
needed raw material from the forests of Lapland, but only 100 finishing hours and 80 carpentry
hours from his elves. Demand for trains is unlimited, but at most 40 soldiers are bought each week.

Santa wants to maximise weekly profit (revenues − costs).

Formulate a mathematical model of Santa’s situation that can be used to maximise Santa’s weekly
profit.

x 1=¿ Soldiers

x 2=¿ Trains

max z=3 x 1 +2 x 2

s.t.

2 x1 + x 2 ≤100

x 1+ x2 ≤ 80

x 1 ≤ 40

x1 , x2 ≥ 0

[]
x2
X BV = s3
x1
 ¿
Z =180
C BV = [ 2 , 0 , 3 ]

[ ]
1 0 2
B= 1 0 1
0 1 1

[ ]
−1 2 0
−1
B = −1 1 1
1 −1 0
−1
C BV . B =[ 1, 1 , 0 ]

¿ −1
Z =C BV . B . b

[ ]
101
¿
Z Shadow Price (Finishing Hours )
=[ 1 ,1 , 0 ] × 8 0 =181
40

Shadow Price(Finishing Hours)=Z ¿(new )−Z ¿(old)

Shadow Price(Finishing Hours)=181−1 80

Shadow Price(Finishing Hours)=R 1

[ ]
10 0
¿
Z Shadow Price (Carpentry Hours)
= [ 1 , 1, 0 ] × 8 1 =181
40
¿ ¿
Shadow Price(Carpentry Hours )=Z(new)−Z(old)

Shadow Price(Carpentry Hours )=181−180

Shadow Price(Carpentry Hours )=R 1

[ ]
100
¿
Z Shadow Price (SOldier Demand ) =[ 1 ,1 , 0 ] × 8 0 =180
41

Shadow Price(SOldier Demand) =Z ¿(new )−Z¿(old)

Shadow Price(SOldier Demand) =180−180

Shadow Price(SOldier Demand) =R 0

Premium Shadow Price(SOldier Demand)=Shadow Price(SOldier Demand )+Cost of 1 x soldier

Premium Shadow Price(SOldier Demand)=R 0+ R 2 4

Premium Shadow Price(SOldier Demand)=R 2 4