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maximization problem

# maximization problem

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12/21/2012

20/01/2009
Problem
Klein Chemicals , Inc., produces a special oil-base material that is currently in short supply. Fourof Klein’s customers have already placed orders that together exceed the combined capacity of Klein’s two plants. Klein’s management faces the problem of deciding how many units it shouldsupply to each customer. Because the four customers are in different industries, different pricescan be charged based on the various industry pricing structures. However, slightly different pro-duction costs at the two plants and varying transportation costs between the plants and custom-ers make a “sell to the highest bidder “ strategy questionable. After considering price , productioncosts , and transportation costs, Klein has established the following proﬁt per unit for each plant-customer alternative.
Applied Quantitative Analysis
Applied Quantitative Analysis- Transportation maximization problem
1

20/01/2009
Background
The problem given to us is one of a Proﬁt maximization problem. The question provides details of 2 sources with their supply to 4 destinations & their respective demands. It is an unbalancedtransportation problem with demand exceeding the supply. So it is compensated with a dummy supply origin with costs of transportation in the row accounted for as 0. It is the reverse of a nor-mal transportation problem which involves minimization of cost.However, to solve the same we ﬁrst need to convert the given problem into a minimization one by subtracting all the proﬁt ﬁgures from the highest given ﬁgure & carry on as a normal one
Assumptions
Let,X11 denote the number of units shipped from origin 1 (Clifton Springs) to destination 1 (D1),X12 denote the number of units shipped from origin 1 (Clifton Springs) to destination 2 (D2),and so on.There are 2 (m) origins and 4 (n) destinations, hence there are 2*4 (m*n) = 8 decision variables.The objective of the transportation problem is to maximize the total proﬁt, the proﬁt expressions would be as follows:Proﬁt for units shipped from Clifton Springs = 32 X11 + 34 X12 + 32 X13 + 40 X14Proﬁt for units shipped from Danville = 34 X21 + 30 X22 + 28 X23 + 38 X24 With 2 plants, Klein Chemicals Inc. has two supply constraints.X11 + X12 + X13 + X14 <= 5000 Clifton Springs supply X21 + X22 + X23 + X24 <= 3000 Danville supply  With 4 distribution centers, Klein Chemicals Inc. has four demand constraints.X11 + X21 = 2000 D1 demandX12 + X22 = 5000 D2 demandX13 + X23 = 3000 D3 demandX14 + X24 = 2000 D4 demandCombining the objective function and constraints into one model provides a 8-variable, 6-constraint linear programming formulation of the Klein Chemicals Inc Transportation problem.
Applied Quantitative Analysis
Applied Quantitative Analysis- Transportation maximization problem
2

20/01/2009
MAX 32 X11 + 34 X12 + 32 X13 + 40 X14 + 34 X21 + 30 X22 + 28 X23 + 38 X24Subject to (s.t)X11 + X12 + X13 + X14 <= 5000 Clifton Springs supply X21 + X22 + X23 + X24 <= 3000 Danville supply X11 + X21 = 2000 D1 demandX12 + X22 = 5000 D2 demandX13 + X23 = 3000 D3 demandX14 + X24 = 2000 D4 demandXij >= 0 for i=1, 2; j=1, 2, 3, 4
Input Table
Applied Quantitative Analysis
Applied Quantitative Analysis- Transportation maximization problem
3