Tunis Business School Spring 2019

Linear Programming: Problem set 2

This is a graded homework for all groups, to be submitted in the first session after the break

The formulation quiz for groups 1, 2 and 7 will be selected from this problem set

Problem 1:

A workshop makes 2 models of wooden toys. Model 1 requires 5 hours of machining while
the second model only requires 3 hours. The workshop has 160 machining hours per week.
Model 1 requires 4 kg of wood and Model 2 requires 3kg, each week we only have 250 kg of
wood available.

Model 1 is sold for $20 per unit while Model 2 is sold at only $15 per unit.

1) Formulate the problem to decide how many units of each model should be made each week
so as to maximize profit.
2) A new design of model 2 allows consuming only 2 kg of wood instead of 3. How to
modify the problem formulation to consider whether to use the old or the new design?
3) Actually the new design incurs a fixed cost of $100. Make the necessary modification in
the formulation of the problem

(Hint: refer to the following link, page 6, section titled “Either/or constraints”

Link: https://www.sce.carleton.ca/faculty/chinneck/po/Chapter13.pdf )

Problem 2:

A group of 5 students are going to be selected by a company for an internship program. 10 candidates
(denoted by numbers from 1 to 10) are eligible for final selection. Some of the candidates are enrolled
in a state school while others are enrolled in local a private university. All candidates had to take
practical evaluations to prove their proficiency in database management, data mining and coding in
Python; the evaluations were graded on a scale of 1 to 10. It is crucial that the group of students
selected have the highest aggregate grade in data mining and database management. Moreover, the
aggregate score in Python coding for the students selected must not be below 9.5.

The table below contains information about each of the candidates:

Grades
Student University DB Data Python
management mining coding
1 private 7 5 6
2 private 5 6 5
3 state 9 10 7
4 private 8 8 6
5 state 8 6 10
6 private 4 10 7
7 state 5 6 7
8 private 7 5 9
9 state 10 8 7
10 state 6 7 6
 1) Formulate a linear integer program for selecting the best group of students
2) Modify the problem so that not all selected students are enrolled in the same university
3) Formulate the following extra requirements one by one :
a) Assume that if student (1) is selected , we must also accept student (8) as their skills sets
are complimentary
b) Assume that student (2) does not accept to participate in the internship program without
student (4) , the latter however , does not mind
c) Assume that , since students (9) and (10) have taken the same courses and have very
similar skill sets , only one of them must be selected
d) If we accept students (3) and (4) , then we must accept student (9)
e) If 3 or more of (1), (2), (3), (4) , and (5) are accepted, then student (10) must be accepted
f) If 3 or more of (1), (2), (3), (4) , and (5) are accepted, then student (10) must not be
accepted

(Hint: refer to the book “Applications of LP”, section 3.3.2 titled “Logical conditions”
from page 43 to 46.

Link: https://drive.google.com/open?id=1Sal1CSnCDQPQQaApCCOtjclqG_iFLTqH )

Problem 3:

A company has 5 machines denoted A, B, C, D and E, used to mix the ingredients used to produce its
final products.

For the upcoming week, 6 batches (denoted by 1, 2,…, 6) are going to be produced. The company has
a very strict policy dictating that the treatment of each batch in its entirety should be done on one
single machine.
The table below details the operating time spent by each machine on each batch in hours

Batch1 Batch 2 Batch 3 Batch 4 Batch 5 Batch 6

Machine A 42 38 68 21 75 68

Machine B 51 42 65 20 75 72

Machine C 50 40 65 20 80 70

Machine D 47 45 65 18 71 78

Machine E 48 48 62 20 82 67

The company seeks to assign the batches to the machines in a way that minimizes the total duration of
the production process
1) Formulate the problem as an IP
2) Modify the IP from question (1) to consider each of these independent conditions separately (one
by one)
a) batches 1 and 2 have to be treated by the same machine
b) Batch 6 cannot be treated on machine C unless a maximum of 2 other batches are treated on it
c) if we use machine B for batches 2 and 4 , batch 5 has to be assigned to machine D
 Problem 4:
A municipal construction project has funding requirements over the next four years of $2 million, $4
million, $8 million, and $5 million respectively. Assume that all of the money for a given year is
required at the beginning of the year. The city intends to sell exactly enough long-term bonds to cover
the project funding requirements, and all of these bonds, regardless of when they are sold, will be paid
off (mature) on the same date in a distant future year. The long-term bond market interest rates (that is,
the costs of selling bonds) for the next four years are projected to be 7 percent, 6 percent, 6.5 percent,
and 7.5 percent respectively. Bond interest paid will commence one year after the project is completed
and will continue for 20 years, after which the bonds will be paid off. During the same period the
short-term interest rates on time deposits (that is, what the city can earn on deposits) are projected to
be 6 percent, 5.5 percent, and 4.5 percent respectively (the city will clearly not invest money in short-
term deposits during the fourth year).

What is the city’s optimal strategy for selling bonds and depositing funds in time accounts in
order to complete the construction project ?

Problem 5:
A fast food chain that is heavily present in the region of Québec seeks to penetrate the market
at the region of Montréal. The management is considering granting several franchises in order
to lower the risks, increase revenues and have better negotiating position with suppliers.
Management also wants to ensure that each of the new franchises is located in an “isolated”
location, which means it has to be sufficiently far away from other franchises. At least 3 km
has to separate any two franchises. Many candidates have shown interest in acquiring a
franchise, 12 candidates are being considered. Each of the candidates has suggested a possible
adequate location for a new franchise. The potential annual profits of each franchise are
estimated based on the characteristics of the population of the district where it’s going to be
located (with the assumption that it’s “isolated”). The estimations are represented in the table
below.

Location Estimated annual net

profits (if it’s isolated)
A $100 000
B 120 000
C 100 000
D 110 000
E 140 000
F 120 000
G 130 000
H 120 000
I 100 000
J 110 000
K 90 000
L 120 000

For every candidate franchise , the following table indicates whether or not (Yes/No) the
distance separating each franchise from the others is less than 3 Km
Note that it is strictly unacceptable to establish 2 franchises that are less than 3 km away from
each others.

Y: if the distance is less than 3 Km and N otherwise

A B C D E F G H I J K L
A -
B Y -
C N N -
D N N N -
E N N N Y -
F N N N N Y -
G N N Y N N N -
H N N Y N N N Y -
I N N N N N N N N -
J Y N N N N N Y Y N -
K N Y N N N N N N Y N -
L N Y Y N N N N N Y Y N -

Formulate the problem as an LP