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# ISM 6407 Fall 2009

LINEAR PROGRAMMING FORMULATION PROBLEMS AND SOLUTIONS 7-14 The Electrocomp Corporation manufactures two electrical products: air conditioners and large fans. The assembly process for each is similar in that both require a certain amount of wiring and drilling. Each air conditioner takes 3 hours of wiring and 2 hours of drilling. Each fan must go through 2 hours of wiring and 1 hour of drilling. During the next production period, 240 hours of wiring time are available and up to 140 hours of drilling time maybe used. Each air conditioner sold yields a profit of \$25. Each fan assembled may be sold for a \$15 profit. Formulate and solve this LP production mix situation to find the best combination of air conditioners and fans that yields the highest profit. Use the corner point graphical approach. Let X1 = the number of air conditioners scheduled to be produced X2 = the number of fans scheduled to be produced Maximize Subject to: 25X1 + 3X1 + 2X1 + 15X2 (maximize profit) 2X2 ≤ 240 (wiring capacity constraint) X2 ≤ 140 (drilling capacity constraint) X1, X2 ≥ 0 (non-negativity constraints)

Optimal Solution: X1 = 40 X2 = 60 Profit = \$1,900 7-15 Electrocomp’s management realizes that it forgot to include two critical constraints (see Problem 7-14). In particular, management decides that to ensure an adequate supply of air conditioners for a contract, at least 20 air conditioners should be manufactured. Because Electrocomp incurred an oversupply of fans in the preceding period, management also insists that no more than 80 fans be produced during this production period. Resolve this product mix problem to find the new optimal solution. Let X1 = the number of air conditioners scheduled to be produced X2 = the number of fans scheduled to be produced Maximize Subject to: 25X1 + 3X1 + 2X1 + X1 15X2 (maximize profit) 2X2 ≤ 240 (wiring capacity constraint) X2 ≤ 140 (drilling capacity constraint) ≥ 20 (a/c contract constraint) X2 ≤ 80 (maximum # of fans constraint) X1, X2 ≥ 0 (non-negativity constraints)

Optimal Solution: X1 = 40 X2 = 60 Profit = \$1,900

09 x 33. X2 ≥ 0 (minimize total risk) (limit on total investment) (average return must be at least 8%) (non-negativity constraints) Optimal Solution: X1 = \$16.000 (9 x \$20.67 + . How much should be invested in each stock? What is the average risk for this investment? What is the estimated return for this investment? Let X1 = the number of dollars invested in petrochemical stocks X2 = the number of dollars invested in utility stocks Maximize Subject to: .33 Total risk = 283.000).12 x 16.33/50.000 Return = \$4. suppose the investor has changed his attitude about the investment and wishes to give greater emphasis to the risk of the investment. .67).000 = 6).02X2 ≥ 0 X1.666. Although a long-range goal is to get the highest possible return. The total risk of the portfolio is found by multiplying the risk of each stock by the dollars invested in that stock.04X1 − 4X2 X2 ≤ 50.33 (which equates to an average risk of 283. The following table provides a summary of the return and risk: Stock Petrochemical Utility Estimated Return 12% 6% Risk Index 9 4 The investor would like to maximize the return on the investment.000 . The total return would be \$4000 (.67 X2 = \$33. Now the investor wishes to minimize the risk of the investment as long as a return of at least 8% is generated. but the average risk index of the investment should not be higher than 6.333.33). X2 ≥ 0 (maximize return on investment) (limit on total investment) (average risk cannot exceed 6) (non-negativity constraints) Optimal Solution: X1 = \$20. which just happens to be a return of exactly 8% (\$4000/\$50.333. 7-21 Referring to the Texas Lotto situation in Problem 7-20.333.000 per year in the stock market.000/50.000 2X2 ≤ 0 X1.12X1 + X1 + 3X1 − .000).333. A risk index on a scale of 1–10 (with 10 being the most risky) is assigned to each of the two stocks.06X2 X2 ≤ 50. some consideration is given to the risk involved with the stocks. How much should be invested in each stock? What is the average risk for this investment? What is the estimated return for this investment? Let X1 = the number of dollars invested in petrochemical stocks X2 = the number of dollars invested in utility stocks Minimize Subject to: 9X1 + X1 + .000 + 4 x \$30. which yields an average risk of 6 (300.ISM 6407 Fall 2009 7-20 A winner of the Texas Lotto has decided to invest \$50. Under consideration are stocks for a petrochemical firm and a public utility.000 X2 = \$30.666.200 The total risk is 300. Formulate this as an LP problem and find the optimal solution.000 = 5.

24 1. per dollar invested Dividend rate potential 4% 8% Each member of the club has an investment goal of (1) an appreciation of no less than \$720 in the short term. and dividend rates. (2) an appreciation of at least \$5. intermediate growth.177.5 Factor Short term growth potential.08X2 X1.36 . These data on each stock are as follows: Stock Louisiana Gas and Trimex Insulation Power Company .818. and Weinberger has analyzed and recommended two stocks to an investors’ club of college professors. Leibowitz. The professors were interested in factors such as short term growth.ISM 6407 Fall 2009 7-24 The stock brokerage firm of Blank.24X2 1.67X1 .18 .50X2 . and (3) a dividend income of at least \$200 per year.000 ≥ 200 ≥ 0 (minimize total investment) (appreciation in the short term) (appreciation in next three years) (dividend income per year) (non-negativity constraints) Optimal Solution: X1 = \$1.36X1 1.359 X2 = \$1. What is the smallest investment that a professor can make to meet these three goals? Let X1 = the number of dollars invested in Louisiana Gas and Power X2 = the number of dollars invested in Trimex Insulation Co.67 1.04X1 + + + + X2 . per dollar invested Intermediate growth potential (over next three years). X2 ≥ 720 ≥ 5.18 Total investment = \$3. Minimize Subject to: X1 .000 in the next three years.

A pound of beef contains 10 units of Vitamin 1 and 12 units of Vitamin 2. This product is made from beef products and grain. How many pounds of beef and grain should be included in each pound of dog food? What is the cost and vitamin content of the final product? Let X1 = the number of pounds of beef in each pound of dog food X2 = the number of pounds of grain in each pound of dog food Minimize Subject to: . Each pound of beef costs \$0.25 Cost = \$. X2 = ≥ ≥ ≥ 0 (minimize cost per pound of dog food) 1 (total weight should be one pound) 9 (at least 9 units of vitamin 1 in a pound) 10 (at least 10 units of vitamin 2 in a pound) (non-negativity constraints) Optimal Solution: X1 = . A pound of grain contains 6 units of Vitamin 1 and 9 units of Vitamin 2.60. and each pound of grain costs \$0.90.60X2 X2 6X2 9X2 X1.75 X2 = .825 .ISM 6407 Fall 2009 7-25 Woofer Pet Foods produces a low-calorie dog food for overweight dogs.90X1 X1 10X1 12X1 + + + + . Formulate this as an LP problem to minimize the cost of the dog food. A pound of the dog food must contain at least 9 units of Vitamin 1 and 10 units of Vitamin 2.

75 . Each cabinet produced must go through three departments: carpentry.5 1 200 Finishing (Hours/Cabinet) . X2 ≥ 0 (non-negativity constraints) X2 = 90 Revenue = \$3.M. along with net revenue per unit produced. (a) Formulate as an LP problem. painting.75X2 ≤ 125 (finishing hours available) ≥ 60 (contract requirement on F. Cabinet Style French Provincial Danish Modern Dept. cabinets) X1.75X1 X1 + + + + 25X2 (maximize revenue) 2X2 ≤ 360 (carpentry hours available) X2 ≤ 200 (painting hours available) . (b) Solve using an LP software program or spreadsheet. The firm has a contract with an Indiana distributor to produce a minimum of 300 of each cabinet per week (or 60 cabinets per day). cabinets) X2 ≥ 60 (contract requirement on D.ISM 6407 Fall 2009 SOLUTIONS TO SELECT PROBLEMS FROM CHAPTER 8 8-1 (Production problem) Winkler Furniture manufactures two different types of china cabinets: a French Provincial model and a Danish Modern model. and finishing.930 Optimal Solution: X1 = 60 .75 125 Net Revenue per Cabinet (\$) 28 25 Let X1 = the number of French Provincial cabinets produced each day X2 = the number of Danish Modern cabinets produced each day Maximize Subject to: 28X1 3X1 1.5X1 . capacity (hrs) Carpentry (Hours/Cabinet) 3 2 360 Painting (Hours/Cabinet) 1. The table below contains all relevant information concerning production times per cabinet produced and production capacities for each operation per day. Owner Bob Winkler would like to determine a product mix to maximize his daily revenue.P.

Investment Los Angeles municipal bonds Thompson Electronics.6X2 + + + . In particular. Let X1 = dollars invested in Los Angeles municipal bonds X2 = dollars invested in Thompson Electronics X3 = dollars invested in United Aerospace X4 = dollars invested in Palmer Drugs X5 = dollars invested in Happy Days Nursing Homes Maximize Subject to: .5X1 + + + .6X3 + + + . aerospace. she requests that the firm select whatever stocks and bonds they believe are well rated. X3.000 0 0 0 (maximize return on investment) (total funds available) (municipal bond restriction) (electronics.053X1 X1 . aerospace firms. X4.300 .049X3 X3 . the client’s goal is to maximize projected return on investments.000 X5 = \$25.9 8. Subject to these restraints. (b) Solve this problem.068X2 X2 . but within the following guidelines: (a) Municipal bonds should constitute at least 20% of the investment.2X5 .000 for her money obtained recently through the sale of land holdings in Ohio. aware of these guidelines.4X5 X5 ≤ ≥ ≥ ≤ ≥ 0 250.2X4 . prepare a list of high-quality stocks and bonds and their corresponding rates of return.2X2 . (c) No more than 50% of the amount invested in municipal bonds should be placed in a highrisk.4X1 -.6X4 + + + . Inc. Palmer Drugs Happy Days Nursing Homes Projected Rate of Return (%) 5. and drug manufacturers. high-yield nursing home stock.8 (a) Formulate this portfolio selection problem using LP.000 X2 = \$0 X3 = \$0 X4 = \$175. The client has a good deal of trust in the investment house. United Aerospace Corp. The analysts at Heinlein and Krampf.8X1 -.000 ROI = \$20. (b) At least 40% of the funds should be placed in a combination of electronic firms. drugs combo) (nursing home as a percent of bonds) (non-negativity constraints) X1.084X4 X4 .8 4.3 6.2X3 .118X5 X5 . but she also has her own ideas about the distribution of the funds being invested.4 11.ISM 6407 Fall 2009 8-2 (Investment decision problem) The Heinlein and Krarnpf Brokerage firm has just been instructed by one of its clients to invest \$250. X2. X5 Optimal Solution: X1 = \$50.

X3. or 11 P. S.M.. X2.M–7 A. The famous Y. Chang Restaurant is open 24 hours a day. 3 P.5. 7 A.M–7 P.5.M. where i = 1.3. 11 AM. Chang’s scheduling problem is to determine how many waiters and busboys should report for work at the start of each time period to minimize the total staff required for one day’s operation.3.ISM 6407 Fall 2009 8-3 (Restaurant work scheduling problem).M. X5. 11 P.2. The following table shows the minimum number of workers needed during the six periods into which the day is divided. (Hint: Let Xi equal the number of waiters and busboys beginning work in time period i.. and each works an 8-hour shift.M. 7 AM.M–11 P.M. 11 A. Number of Waiters and Busboys Required 3 12 16 9 11 4 Let Xi = the number workers beginning work at the start of time period i (i=1. 2.M–3 P.M–11 A.6) Minimize Subject to: X1 X1 X1 + X2 X2 + X3 X3 + X4 X4 + X5 X5 + X6 X1.4.M–3 A.M..M. 7 P..4. X6 + X2 + X3 + X4 + X5 + + X6 X6 ≥ ≥ ≥ ≥ ≥ ≥ ≥ 0 3 12 16 9 11 4 (min..M.6. staff size) (period 1) (period 2) (period 3) (period 4) (period 5) (period 6) (non-negativity) . 7 P. Waiters and busboys report for duty at 3AM. 3 P. X4..M.) Period 1 2 3 4 5 6 Time 3 A.

Formulate this problem and solve for the optimal daily mix of the three feeds. At the same time. The stable owner.17X3 X3 .5X1 X1 + + + + + + + .5 \$0. a highly enriched grain. he would like to keep the overall daily cost of feed to a minimum. units of each ingredient per pound of feed mix.14X2 3X2 X2 5X2 1. and a mineral product.5 \$0. Consequently. ≥ 6 2 9 8 5 6 0 (minimize cost) (ingredient A) (ingredient B) (ingredient C) (ingredient D) (ingredient E) (maximum feed per day) (non-negativity constraints) . X2. the stable owner is aware that an overfed horse is a sluggish worker.5 \$0. he determines that 6 pounds of feed per day are the most that any horse needs to function properly.09 Feed Mix Enriched Grain (units/lb) 3 1 5 1.5X1 3X1 X1 .17 Minimum Daily Requirement (units) 6 2 9 8 5 X1 = the number pounds of oat product per horse each day X2 = the number pounds of enriched grain per horse each day X3 = the number pounds of mineral product per horse each day . The table below shows these minimum requirements. In addition.ISM 6407 Fall 2009 8-4 (Animal feed mix problem) The Battery Park Stable feeds and houses the horses used to pull tourist-filled carriages through the streets of Charleston’s historic waterfront area.09X1 2X1 .5X2 .5X3 X3 X1.14 Mineral Product (units/lb) 1 .5 6 2 1. and costs for the three mixes. The feed mixes available for the horses’ diet are an oat product.5X3 6X3 2X3 1. X3 ≥ ≥ ≥ ≥ ≥ ≤ Minimize s. Diet Requirement (Ingredients) A B C D E Cost/lb Let Oat Product (units/lb) 2 . an ex-racehorse trainer.5 . recognizes the need to set a nutritional diet for the horses in his care.5 3 1 . Each of these mixes contains a certain amount of five ingredients needed daily to keep the average horse healthy.t.5X2 X2 + + + + + + + .

Let X1 = the number of newspaper ads placed X2 = the number of TV spots purchased 925X1 + 2.04X1 + . One plan is for a series of half. The TV viewing time under consideration has an exposure rating per spot of 5% in city homes and 3% in the northwest suburbs. (a) Formulate using LP.03X2 ≥ X1. a chain of four retail stores on Chicago’s North Side.000. The Sunday newspaper has corresponding exposure rates of 4% and 3% per ad.03X1 + . Diversey Paint would like to select the least costly advertising strategy that would meet desired exposure levels. and the advertising director is interested in an exposure level of at least 40% within the city’s neighborhoods and 60% in northwest suburban areas. X2 ≥ 0 (minimize cost) .4 (city exposure) .000X2 . is considering two media possibilities. (b) Solve the problem.ISM 6407 Fall 2009 8-6 (Media selection problem) The advertising director for Diversey Paint and Supply.6 (suburb exposure) (non-negativity constraints) Minimize Subject to: . The cost of a half-page Tribune advertisement is \$925.05X2 ≥ . The stores are expanding their lines of do-it-yourself tools. a television spot costs \$2.page ads in the Sunday Chicago Tribune newspaper. and the other is for advertising time on Chicago TV.

T..ISM 6407 Fall 2009 8-11 (College meal selection problem) Kathy Roniger.2X5 .2 3.5X7 8X7 63X7 ≥ ≤ ≥ ≤ ≥ ≤ 900 1500 4 50 26 50 X1. (Cal.58X5 128X5 128X5 3.17 0.5X4 83X4 + + + + + + + .1 2.6X1 295X1 295X1 .35 1. X5. and (5) no more than 50 grams of carbohydrates. down to X7 = the number of pounds of potatoes per student in the evening meal Minimize S. The cost per pound for each food item and the contribution to each of the five nutritional requirements are given in the accompanying table: Calories/ Pound 295 1216 394 358 128 118 279 Iron (mg/lb) 0.2 Table of Food Values and Costs Fat Protein Carbs. (2) at least 4 milligrams of iron. X6.3 3. (gm/lb) (gm/lb) (gm/lb) 16 16 22 96 81 0 9 74 0 0.8 7 28 1.4X6 14X6 19X6 + + + + + + + ≥ 0 . X3.60 2.500 calories.25 0. For an evening meal. X7 .2X7 .2 14.) (Iron) (Fat) (Protein) (Carbs.33 Food Item Milk Ground Meat Chicken Fish Beans Spinach Potatoes What combination and amounts of food items will provide the nutrition Roniger requires at the least total food cost? Let X1 = the number of pounds of milk per student in the evening meal X2 = the number of pounds of ground meat per student in the evening meal Etc.2X4 . she feels that the following five meal-content requirements should be met: (1) between 900 and 1. (3) no more than 50 grams of fat.8X5 7X5 28X5 + + + + + + + 1.5 83 0 0.2X2 96X2 81X2 + + + + + + 1. X4.17X6 118X6 118X6 14.58 1.5 8 63 Cost/ Pound (\$) 0. On a particular day.33X7 279X7 279X7 2.) .3X3 9X3 74X3 + + + + + + 2.35X2 1216X2 1216X2 . (4) at least 26 grams of protein.25X4 358X4 358X4 3.4 14 19 0.) (Cal.15 2.2 4.1X6 1.15X3 394X3 394X3 4. campus dietician for a small Idaho college. X2.2 0. is responsible for formulating a nutritious meal plan for students.2X1 16X1 16X1 22X1 + + + + + + 2. Roniger’s food stock includes seven items that can be prepared and served for supper to meet these requirements.

ISM 6407 Fall 2009 8-12 (High tech production problem) Quitmeyer Electronics Incorporated manufactures the following six microcomputer peripheral devices: internal modems. and Quitmeyer Electronics believes that it can sell as many units of each product as it can manufacture. X2. The table that follows summarizes the revenues and material costs for each product: Device Internal modem External modem Graphics circuit board CD drive Hard disk drive Memory expansion board Revenue Per Unit Sold (\$) 200 120 180 130 430 260 Material Cost Per Unit (\$) 35 25 40 45 170 60 In addition.80X5 18X5 15X5 9X5 + + + + 191. \$12 per hour for test device 2. external modems. X6 ≥ 0 . each week Maximize S.95X2 3X2 5X2 1X2 + + + + 135. X3. as shown in the table the following table: Internal Modem Test device 1 7 Test device 2 2 Test device 3 5 External Modem 3 5 1 Circuit Board 12 3 3 CD Drive 6 2 2 Hard Drive 18 15 9 Memory Board 17 17 2 The first two test devices are available 120 hours per week. variable labor costs are \$15 per hour for test device 1.. 161. graphics circuit boards.35X1 7X1 2X1 5X1 + + + + 92.50X3 12X3 3X3 3X3 + + + + 82. The market for all six computer components is vast. (a) Formulate this problem as an LP model. CD drives. X4. Quitmeyer Electronics wants to maximize its profits. The third (device 3) requires more preventive maintenance and may be used only 100 hours each week. expansion boards scheduled for mfg. What is the best product mix? (c) What is the value of an additional minute of time per week on test device 1? Test device 2? Test device 3? Should Quitmeyer Electronics add more test device time? If so.50X4 6X4 2X4 2X4 + + + + 249. on which equipment? Let X1 = the number of internal modems scheduled for manufacture each week X2 = the number of external modems scheduled for manufacture each week Etc.T. Each of these technical products requires time. in minutes. X5. down to X6 = the number of mem. hard disk drives.75X6 17X6 17X6 2X6 ≤ ≤ ≤ 7200 7200 6000 X1. and memory expansion boards. (b) Solve the problem by computer. and \$18 per hour for test device 3. on three types of electronic testing equipment.

X8 .20X7 + + + + .01X4 .0 1.3 5.18X6 + + + + . X2.13X2 .30X2 .5 24.09 0.26X3 + + + + + + + . Carbide 3 lim.025X5 + + + + .7X1 .25X8 .0 0 3.6 5.01X2 .12X3 .03X4 .23X8 .01X2 X2 X6 X7 X8 X8 + + + + + .24X6 .10 0.13 0.0 0 0 0 Silicon (%) 15.0 Pounds Available No limit 300 No limit No limit No limit 50 200 100 Cost Per Pound (\$) 0.15X1 .05X5 .15X1 .07 0.09X8 ≥ ≤ ≥ ≤ ≥ ≤ ≤ ≤ ≤ ≤ = 42 46 86 92 101 107 300 50 200 100 2000 .T.0 30.0 25.25X8 + .55X2 .0 23.12X3 .15 0. X6. Carbide 2 lim. down to X8 = the number of pounds of carbide 3 in one ton of steel Minimize S. X5.23X8 .0 5.25X7 .01X4 .12X1 .26X3 . Carbide 1 lim. Weighs 1 ton X1 + X2 + X3 + X4 + X5 + X6 + ≥ 0 X7 + X1.ISM 6407 Fall 2009 8-15 (Material blending problem) Amalgamated Products has just received a contract to construct steel body frames for automobiles that are to be produced at the new Japanese factory in Tennessee.25X7 .24X6 . X3.05 Maximum Percent 2.09 Let X1 = the number of pounds of alloy 1 in one ton of steel X2 = the number of pounds of alloy 2 in one ton of steel Etc.12X7 + .30X2 ..10X4 . (Mnmin) (Mn-max) (Si-min) (Si-max) (C-min) (C-max) Alloy 2 lim. X7.15X3 .03X1 + + + + + + + .0 25. The table below details these materials.025X5 .09X4 . The Japanese auto manufacturer has strict quality control standards for all of its component subcontractors and has informed Amalgamated that each frame must have the following steel content: Material Manganese Silicon Carbon Minimum Percent 2.12 0.00 Carbon (%) 3.1 4.0 20.55X2 .10X4 . Formulate and solve the LP model that will indicate how much of each of the eight materials should be blended into a 1-ton load of steel so that Amalgamated meets its requirements while minimizing cost.0 2.0 55. X4.10X6 + . Material Available Alloy 1 Alloy 2 Alloy 3 Iron 1 Iron 2 Carbide 1 Carbide 2 Carbide 3 Manganese (%) 70.03X4 + + + + + .07X5 .0 12.0 0 18.18X6 .0 1.12 0.7X1 .0 10.35 Amalgamated mixes batches of eight different available materials to produce one ton of steel used in the body frames.03X1 .20X7 .05X5 .3 4.0 26.