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Decision Making Under Certainty, PGP 2013-14 Problem Set 1, Due 11:59 pm, Friday, December 06, 2013

Wherever asked to construct a Mathematical Programming Model, clearly define the indices, parameters and decision variables. Describe in words what is implied by your objective function and each of the constraints. Also, clearly report the final solution obtained from the solver. Upload all your submissions (Solution Presentation in word and Implementation in Excel) as a zipped folder on moodle. Name the folder as MD_A1_<section>_<group no.>.

1. A company manufactures mechanical heart valves from the heart valves of pigs. Different heart operations require valves of different sizes. The company purchases pig valves from three different suppliers. The cost and size mix of the valves purchased from each supplier are given in the Table below. Each month, the company places an order with each supplier. At least 500 large, 300 medium, and 300 small valves must be purchased each month. Because of the limited availability of pig valves, at most 500 valves per month can be purchased from each supplier. Construct a Linear Programming Model and solve it using Solver to help the company acquire the required valves at a minimum cost.

Supplier 1 Supplier 2 Supplier 3

Cost/valve % small % medium % large $20 40 40 20 $16 30 35 35 $12 20 20 60

2. A paper recycling plant processes box board, tissue paper, newsprint, and book paper into pulp that can be used to produce three grades of recycled paper. The prices per ton and the pulp contents of the four inputs are shown in the Table below. Two methods, de-inking and asphalt dispersion, can be used to process the four inputs into pulp. It costs $20 to de-ink a ton of any input. The process of de-inking removes 10% of the inputs pulp, leaving 90% of the original pulp. It costs $15 to apply asphalt dispersion to a ton of material. The asphalt dispersion process removes 20% of the inputs pulp. At most, 3000 tons of input can be run through the asphalt dispersion process or the de-inking process. Grade 1 paper can be produced only with newsprint or book paper pulp; grade 2 paper only with book paper, tissue paper, or box board pulp; grade 3 paper only with newsprint, tissue paper, or box board pulp. To meet its current demands, the company needs 500 tons of pulp for grade 1 paper, 500 tons of pulp for grade 2 paper, and 600 tons of pulp for grade 3 paper. Construct a Linear Programming Model and solve it using Solver to determine how to minimize the cost of meeting the demands for pulp.

Cost per ton Pulp content

Box board $5 15%

Tissue paper $6 20%

Newsprint $8 30%

Book paper $10 40%

3. A company has two factories, one at Liverpool and one at Brighton. In addition it has four depots with storage facilities at Newcastle, Brimingham, London and Exeter. The company sells its product to six customers C1, C2, ..., C6. Customers can be supplied either from a depot or from the factory direct (see figure below). The distribution costs (which are borne by the company) are known; they are given in the table below (in per ton delivered). Each factory has a monthly capacity given below that cannot be exceeded: Liverpool 150000 tons Brighton 200000 tons

New Castle

C1 C2

Brimingha m

C3 C4 C5





Depots Supplier Newcastle Brmingham Depot Depot


Supplied to Depots Newcastle 0.5 -Brmingham 0.5 0.3 London 1.0 0.5 Exeter 0.2 0.2 Customers C1 1.0 2.0 -1.0 --C2 --1.5 0.5 1.5 -C3 1.5 -0.5 0.5 2.0 0.2 C4 2.0 -1.5 1.0 -1.5 C5 ---0.5 0.5 0.5 C6 1.0 -1.0 -1.5 1.5 A dash indicates the impossibility of certain suppliers for certain depots or customers.

Liverpool Factory

Brighton Factory

London Depot

Exeter Depot

Each depot has a maximum monthly throughput given below that cannot be exceeded: Newcastle 70000 tons Birmingham 50000 tons London 100000 tons Exeter 40000 tons Each customer has a monthly requirement given below that must be met: C1 50000 tons C2 10000 tons C3 40000 tons C4 35000 tons C5 60000 tons C6 20000 tons The company would like to determine the distribution pattern that would minimize overall cost. Report your Linear Programming Model and the resulting solution using Solver.