SMQ3043 - LINEAR PROGRAMMING

ASSIGNMENT
SEM 2 2012/2013

Question:

A company manufactures three products, X, Y, and Z. The sales volume for X is at least 50% of
the total sales of all three products. However, the company cannot sell more than 80 units of X
per day. The three products use one raw material, of which the maximum daily availability is 240
lb. The usage rates of the raw material are 2 lb per unit of X, 4 lb per unit of Y, and 3 lb per unit
of Z. The unit prices for X, Y and Z are RM 20, RM 50 and RM 35 respectively:

a) Formulate a mathematical model for the problem.
x - y - z 0 ... x must be half or more of the total number of units sold
.. x 80 ... no more than 80 units of x can be sold
.. 2x + 4y + 3z 240 ... raw material usage must not exceed 240 lb per day
.. 20x + 50y + 35z = r ... revenue from the sales of x, y, and z. (Often, our objective is to
maximize this.)

b) Determine the optimal product mix for the company:
(i) by hand (manually) AND
(ii) using a solver (e.g: LINDO, LINGO, Microsoft Excel and etc.)

c) Determine the dual price of the raw material resource and its allowable range. If available
raw material is increased by 120 lb, determine the optimal solution and the change in total
revenue using the dual price.

d) Use the dual price to determine the effect of changing the maximum demand for product X
by 10 units.




Instructions:

1. The assignment can be done in a group of 4-5 members.
2. Each group is required to make a presentation during Week 10 and 11. You may use
power-point or PDF presentation. You have to submit the soft copy on MyGuru.
3. All mathematical sentences and symbols must be typed using Equation Editor.
4. You can use internet as your reference, but you also need to use at least two reference
books.
5. Due date: Week 9.