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You are on page 1of 13

On each example worksheet, read the comments at the bottom of the sheet, then

click Tools Solver... to examine the decision variables, constraints, and objective.

To find the optimal solution, click the Solve button.

One of the areas where linear and non-linear programming is applied most frequently is

in manufacturing and production. There are many different ways in which the Solver can

be used to increase productivity, lower cost, reduce waste, etc. We will limit ourselves to

5 different types of models.

First, in the ProductMix worksheet we examine a production mix model. Here we see how

to use parts to build different products and maximize profit.

Second, we look at a machine allocation problem, in two different versions (Alloc1 and

Alloc2). This model determines which machines to use to produce products, in order to

meet a certain demand and minimize cost.

Third, in worksheets Blend1 and Blend2, we look at a 'continuous' rather than 'discrete'

production problem, where the end product requires certain qualities and is a mixture

of previously produced products. This kind of blending problem is very common in

the oil industry and in agriculture, for example.

Fourth, worksheet Process is a process selection problem, where we have several

different ways of producing something (planed wood in this example) and we want to

pick the process that minimizes cost (or maximizes profit).

Finally, in worksheet Cutstock we look at a classic example of a cutting stock problem.

In this model we determine how to cut steel sheets so as to minimize the waste of steel.

335793316.xlsx

Your company manufactures TVs, stereos and speakers, using a common parts inventory

of power supplies, speaker cones, etc. Parts are in limited supply and you must determine

the most profitable mix of products to build.

Part Name

Chassis

Picture Tube

Speaker Cone

Power Supply

Electronics

Number to Build->

Inventory

No. Used

450

0

250

0

800

0

450

0

600

0

TV set

0

Stereo

0

Speaker

0

1

1

2

1

2

1

0

2

1

1

0

0

1

0

1

Profits:

By Product

Total

$0

$0

$0

$0

Problem

Your company builds TVs, stereos and speakers, using a common parts inventory of power supplies,

speaker cones, etc. Parts are in limited supply. What is the best combination of products to build

that maximizes profit?

Solution

1) The variables are clearly the number of TVs, stereos and speakers to build. In this worksheet, they

are given the name Number_to_build.

2) The constraints specify that the number of parts used cannot exceed the supply. This leads to

Number_used <= Number_available

There is also the logical constraint

Number_to_build >= 0 via the Assume Non-Negative option

3) The objective is to maximize profit. In the ProductMix worksheet this is defined as Total_profit.

Remarks

Although this is a good example of a product mix problem, bear in mind the limitations of the

model. For example, market demand and price elasticity is not included in the model -- we assume

that it doesn't matter how many TVs we build, we will always be able to sell them. Nor are there any

pre-specified minimum or maximum of products that need to be made. The effect of introducing

these restrictions can be studied by examining a Sensitivity Report, which you can select from the

dialog appears with the message 'Solver found a solution.'

Page 3

335793316.xlsx

Minimize the cost of operating 3 different types of machines while meeting product demand.

Each machine has a different cost and capacity. There are a certain number of machines

available for each type.

Information on machines

Additional

Initial cost per cost per

day

product

$200

$275

$325

Alpha-1000

Alpha-2000

Alpha-3000

$1.50

$1.80

$1.90

day (Max)

machines

40

60

85

8

5

3

1

1

1

Alpha-1000

Alpha-2000

Alpha-3000

300

300

300

900

750

Alpha-1000

Alpha-2000

Alpha-3000

Total

Demand

40

60

85

Alpha-1000

Alpha-2000

Alpha-3000

Cost

$2,360.00

Problem

A company has three different types of machines that all make the same product. Each

machine has a different capacity, start-up cost and cost per product. How should the company

produce its product with the available machines to meet the daily demand?

Solution

1) The variables are the number of machines to use and the number of products to make on

each machine. In worksheet Alloc1, these are given the names Products_made and

Machines_used.

2) First, there are the logical constraints. These are

Products_made >= 0 via the Assume Non-Negative option

Machines_used >= 0 via the Assume Non-Negative option

Machines_used = integer.

Second, there are the demand and capacity constraints. These are:

Machines_used <= Machines_available

Products_made <= Maximum_products

Total_made >= Demand

3) The objective is to minimize cost. This is defined on the worksheet as Total_cost.

Page 4

335793316.xlsx

Remarks

Notice that we used an integer constraint to make sure no fractions of machines were used.

This has the usual drawback; the problem is much more difficult to solve than the 'relaxed'

version without the integer constraint. When large numbers of machines are involved, the

integer constraint can often be dropped. It is most often not critical whether 1586 or 1587

machines are used, for example. This means that a number of 1586.4 would be acceptable.

However, in this case there are only a few machines and it does make a big difference whether

2 or 3 machines are used. An answer of 2.5 would not be satisfactory.

Page 5

335793316.xlsx

Minimize the cost of operating 3 different types of machines while meeting product demand over a

week's time. Each machine has a different cost and capacity. There are a certain number of machines

available for each type.

Information on machines

Initial cost per Additional cost Products per

day

per product

day (Max)

Alpha-1000

Alpha-2000

Alpha-3000

$200

$275

$325

Number of

machines

$1.00

$1.80

$1.90

40

60

85

8

5

3

Monday

Tuesday

Wednesday

Thursday

Friday

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Alpha-1000

Alpha-2000

Alpha-3000

Alpha-1000

Alpha-2000

Alpha-3000

Made

Carry-over

Total

Demand

Monday

Tuesday

Wednesday

Thursday

Friday

0

0

0

0

0

0

600

0

0

0

0

-600

-600

800

0

0

0

0

-1400

-1400

1000

0

0

0

0

-2400

-2400

725

0

0

0

0

-3125

-3125

750

Alpha-1000

Alpha-2000

Alpha-3000

Monday

Tuesday

Wednesday

Thursday

Friday

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

$0.00

$0.00

$0.00

$0.00

$0.00

Total

Cost

$0.00

Problem

A company has three different types of machines that all make the same product. Each machine has

a different capacity, start-up cost and cost per product. How should the company produce its

product with the available machines to meet the demand over a week's time?

Solution

The solution is very similar in structure to the one found on worksheet Alloc1.

1) The variables are the number of machines to use and the number of products to make on each

machine. In worksheet Alloc2, these given the names Products_made and Machines_used.

2) First, there are the logical constraints. These are

Products_made >= 0 via the Assume Non-Negative option

Machines_used >= 0 via the Assume Non-Negative option

Machines_used = integer.

Page 6

335793316.xlsx

Second, there are the demand and capacity constraints. These are:

Alpha1000s_used <= Alpha1000s_available

Alpha2000s_used <= Alpha2000s_available

Alpha3000s_used <= Alpha3000s_available

Products_made <= Maximum_products

Total_made >= Demand

3) The objective is to minimize cost. This is defined on the worksheet as Total_cost..

Remarks

Please see the comments on integer constraints in worksheet Alloc1. In this model we allow for

products made on one day to be carried over to the next. This makes it possible to meet a demand

for one day that exceeds the capacity of the machines on that particular day.

Page 7

335793316.xlsx

What rock quarries should be used and how much should they produce to meet a certain

quality of limestone (calcium and magnesium content) and minimize cost? There are 4 quarries with

different qualities, capacity and cost to operate. A minimum output of 6000 tons per year is required.

Information on rock quarries

Calcium

contents

(relative to

required

quality)

Quarry 1

Quarry 2

Quarry 3

Quarry 4

1

0.7

1.5

0.7

Magnesium

contents

(relative to

required

quality)

Maximum

production

per year

(tons)

2.3

1.6

1.2

4.1

2000

2500

1300

3000

Quarry 1

Quarry 2

Quarry 3

Quarry 4

Totals

Required

Cost to keep

quarry open Quarry in

per year

use (1=yes,

($Million)

0=no)

3.5

4

4

2

1

1

1

1

Avail Prod

0.00

0.00

0.00

0.00

0

6000

2000

2500

1300

3000

Calcium restrictions

Total Amount of

Calcium

Total Amount

Required

Calcium Required

per Ton

0.9

Magnesium restrictions

Total Amount of

Magnesium

Total Amount

Required

Magnesium

Required per Ton

Cost

2.3

$14

Million

Problem

A company owns four rock quarries from which it can extract limestone with different qualities. Two

qualities are important, the relative amount of calcium and magnesium in the stone. The company

must produce a certain total amount of limestone (6000 tons in this case), and this stone must contain

at least a certain amount of calcium per ton and a certain amount of magnesium per ton. There is a

large fixed cost to keep a quarry operating for extraction purposes each year. Which quarries should

be used to meet the production requirement, and how much limestone should each one produce?

Solution

1) The variables are 0-1 or binary integer variables which determine whether each quarry is open,

Page 8

335793316.xlsx

and amounts of limestone to be extracted from each quarry. In worksheet Blend1 these are given

the names Quarry_use and Amounts_to_produce.

2) First, there are the logical constraints. These are

Amounts_to_produce >= 0 via the Assume Non-Negative option

Quarry_use = binary

Second, there are constraints on the total production and the amount that can be produced at each

quarry. These constraints are:

Total_produced >= Total_required

Amounts_to_produce <= Avail_Production

The right hand side of the second constraint depends on the binary integer variables.

Third, there are constraints on the qualities (calcium and magnesium content) of the limestone:

Calcium_produced >= Calcium_required

Magnesium_produced >= Magnesium_required

Both the left-hand and right-hand sides of these constraints depend on the Amounts_to_produce

decision variables.

3) The objective is to minimize the cost of operating the quarries. This is defined on the worksheet as

Total_cost.

Remarks

Blending problems are characterized by 'ratio constraints' where the constraint is often thought of as

a quality ratio where the numerator and denominator contain decision variables. These would be

nonlinear, but the ratios can be expressed as linear constraints by multiplying both sides by the

denominator of the ratio.

Page 9

335793316.xlsx

What rock quarries should be used and how much should they produce to meet a certain

quality of limestone (calcium and magnesium content) and minimize cost? There are 4 quarries with

different qualities, capacity and cost to operate. A different output and quality is required each year.

Due to environmental restrictions, only 3 quarries are allowed to be open each year.

Information on rock quarries

Calcium

contents

(relative to

required

quality)

Magnesium

contents

(relative to

required

quality)

1

0.7

1.5

0.7

Quarry 1

Quarry 2

Quarry 3

Quarry 4

production quarry open

per year

per year

(tons)

($Million)

2.3

1.6

1.2

4.1

2000

2500

1300

3000

3.5

4

4

2

Year 2

0

0

0

0

0

Year 3

0

0

0

0

0

Year 4

0

0

0

0

0

Year 5

0

0

0

0

0

Year 2

0

0

0

0

0

3100

Year 3

0

0

0

0

0

3500

Year 4

0

0

0

0

0

3700

Year 5

0

0

0

0

0

4000

Quarry 1

Quarry 2

Quarry 3

Quarry 4

Total

Year 1

0

0

0

0

0

Quarry 1

Quarry 2

Quarry 3

Quarry 4

Total

Required

Year 1

0

0

0

0

0

4500

Year 1

0

0

0

0

Year 2

0

0

0

0

Year 3

0

0

0

0

Year 4

0

0

0

0

Year 5

0

0

0

0

Year 1

Year 2

Year 3

Year 4

Year 5

Total Amount of

Calcium

Total Amount

Required

0.9

1.2

1.1

0.8

Year 1

Year 2

Year 3

Year 4

Year 5

Quarry 1

Quarry 2

Quarry 3

Quarry 4

Calcium restrictions

Ton (Minimum)

Magnesium restrictions

Page 10

335793316.xlsx

Total Amount of

Magnesium

Total Amount

Required

1.9

1.7

2.8

1.9

2.1

Year 1

$0.00

Year 2

$0.00

Year 3

$0.00

Year 4

$0.00

Year 5

$0.00

Magnesium Required

per Ton (Minimum)

Cost

Total

$0.00

Problem

A company owns four rock quarries from which it can extract limestone with different qualities. Two

qualities are important, the relative amount of calcium and magnesium in the stone. The company

must produce a certain total amount of limestone, with certain qualities, each year. There is a large

fixed cost to keep a quarry operating for extraction purposes each year. Which quarries should be

used each year, and how much limestone should each one produce each year?

Solution

The solution is very similar in structure to the one found in worksheet Blend1.

1) The variables are 0-1 or binary integer variables which determine whether each quarry is open,

and amounts of limestone to be extracted from each quarry. These variables occur in each year.

In worksheet Blend2, these variables the names Quarry_decisions and Amounts_produced.

2) First, there are the logical constraints. These are

Amounts_produced >= 0 via the Assume Non-Negative option

Quarry_decisions = binary

Second, there are contraints on the total production and the amount that can be produced at each

quarry. These constraints are:

Total_produced >= Total_required

Amounts_produced <= Maximum_Production

The right hand side of the second constraint depends on the binary integer variables.

Third, there are constraints on the quality (calcium and magnesium content) of the limestone:

Calcium_production >= Calcium_requirement

Magnesium_production >= Magnesium_requirement

Both the left-hand and right-hand sides of these constraints depend on the Amounts_produced

decision variables.

Fourth, there is a constraint that limits the number of quarries that can be open each year:

Number_of_open_quarries <= 3

3) The objective is to minimize the cost of operating the quarries. This is defined on the worksheet as

Total_cost.

Remarks

See the comments on worksheet Blend1 about the characteristics of blending problems, which also

apply here.

Page 11

335793316.xlsx

Process Selection

A planing mill uses 3 different types of planers. What planers should the company use

to minimize cost? The total job has to be finished in

hours.

Characteristics of planers

Planer 1

Planer 2

Planer 3

Speed

(ft/min)

Cost

($/hour)

Maximum

wood

thickness

(inches)

5

7

8

$150

$190

$225

6

4

2

1"

2"

0

0

Planer 1

0

0

Planer 2

0

0

Planer 3

0

0

Total

500

800

Demand

3"

0

0

5"

0

0

600

0

300

Hours

0.00

0.00

0.00

Cost

$0.00

$0.00

$0.00

$0.00

Problem

A planing mill has three different planers. Each planer has a different speed, cost to operate and

maximum thickness of wood it can handle. What planers should the mill use to minimize cost, given

an amount of wood and no more than 3 hours to do the job?

Solution

The solution is structurally very similar to the one found on worksheet Alloc1.

1) The variables are the amounts of wood that go through the different planers. In worksheet

Process, these are given the names Wood_through_planer1, Wood_through_planer2 and

Wood_through_planer3.

2) The logical constraints are all defined via the Assume Non-Negative option:

Wood_through_planer1 >= 0

Wood_through_planer2 >= 0

Wood_through_planer3 >= 0

The time and demand constraints give

Total_hours <= Hours_available

Total_planed >= Demand

3) The objective is to minimize cost and this is defined on the worksheet as Total_cost.

Remarks

This is only a small example of a process selection. An example where process selection is very

important is the oil industry. A process selection model is often used to decide what method to use

to create a product.

Page 12

335793316.xlsx

Cutting Stock

A steel mill produces sheets of steel in 3 sizes. These sizes are 100, 80 and 55 inches. Unfortunately,

demand is in 3 other sizes; 45,30 and 18 inches.How should the mill cut the sheets to minimize waste?

Possible combinations

45" sheet

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

100" sheet

80" sheet

55" sheet

Totals

Demand

30" sheet

18" sheet

2

1

1

0

0

0

0

1

1

0

0

0

1

0

0

0

1

0

3

2

1

0

1

0

2

1

0

0

1

0

0

1

3

0

2

3

5

0

1

1

2

4

0

1

3

7

150

12

200

26

175

Waste

(inches)

Number of

sheets

Total

Waste

10

7

1

10

4

16

10

5

17

2

14

8

10

7

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

10

7

1

10

4

16

10

5

17

2

14

8

10

7

1

Total

122

Problem

A steel mill produces sheets of steel in three different sizes. Demand, however, is in 3 other, smaller, sizes.

How should the company cut the sheets of steel in order to minimize waste?

Solution

1) There are only a limited number of ways to cut the sheets. The variables are the number of times we have

to cut a sheet in a certain way. In worksheet Cutstock these are defined as Sheets_used.

2) The constraints are simple and straightforward.

Sheets_made = Demand

Sheets_used >= 0 via the Assume Non-Negative option

Sheets_used = integer

3) The objective is to minimize waste. This is defined on the worksheet as Total_waste.

Remarks

In some situations it may seem rather difficult to write out all the possibilities for cutting stock as is done in

this model. There is a technique that lets the computer do this, called column generation. It is beyond the

scope of this example to fully discuss this technique.

Page 13

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