Linear Programming

Petroleum Blending
We have two types of crudes that can be blended to form premium
and regular type of petrol. This can be done by two processes.
The output depends on the number of times each process is run.
The requirements and outputs for each of the two processes for
each run are given below:
Requirement/Run Output/Run
Process
Crude A Crude B Premium Regular
I 1 3 5 2
II 4 2 3 8
Availability 1000 1500
Minimum Demand 800 700
Profit/Unit 3000 2500

What should we do?

Production Process
A company produces three products X, Y and Z, which sell in
market at price Rs 100/-, 105/- and 115/- per unit respectively.
Total demand for these products in market is known to be at
least 300, 200 and 400 units respectively.

These products require four different raw-materials. Raw

material quantity required per unit of finish product is given
in the table below:
X Y Z
A 1 2 1
B 1 1 2
C 3 2 2
D 15 12 20

These four raw materials cost Rs 12/-, 15/-, 6/- and 0.50/- per
unit. Company can arrange maximum of 1200, 1500, 2400 and 20000
units of raw materials respectively for production purpose.

Company has fixed administrative cost of Rs. 20000/- and it

requires to spend Rs 5/- per unit as distribution cost to sell
one unit in the market.

What should we do?

Sugar Production
We own a sugar processing company that operates two plants at
Nagpur and Pune. Sugarcane is procured from different regions
in the surrounding areas and the maximum availability in each
region is as follows:

 R1: 250 tonnes at Rs.4000/- ton

 R2: 360 tonnes at Rs.4500/- ton
 R3: 450 tonnes at Rs.3500/- ton

Shipping costs in Rs per tonne are

Nagpur Pune
R1 300 400
R2 250 450
R3 500 720

Plant capacities and labour costs are:

Nagpur Pune
Labour cost (Rs/ton) 50 45
Capacity(tons) 450 600

The sugar produced is sold at a price of Rs. 50/kg. There is

ample demand to sell all the sugar produced.

What should we do?

Note: 1 Ton = 1000 kg

Warehousing and Distribution Planning

We own MHCS, a handloom cooperative society in Maharashtra is

responsible for marketing, distribution and sales of handlooms
cooperatives in the state. MHCS collects from cooperatives all
over the state and sells them in the neighbouring states. It has
recently opened warehouses to handle the consolidation and
distribution of merchandise. The warehouses are located in
Nagpur, Pune, Nashik, Kolhapur and Latur.
The merchandise is routed through these warehouses to various
states. The merchandise is transferred in Pallets. The monthly
availability of merchandise at the warehouses (in number of
Pallets) is as given below:
Warehouse Nagpur Pune Nashik Kolhapur Latur
Availability 200 230 120 200 250

The monthly demand (Pallets) in the neighbouring states is as

follows:
State Gujarat Madhya Chhattisgarh Telangana Karnataka Goa
Pradesh
Demand 180 170 130 250 220 50

The cost of transporting one pallet from a given warehouse to

other state is given in the table below (In Rupees Thousands).
Gujarat Madhya Chhattisgarh Telangana Karnataka Goa
Pradesh
Nagpur 850 350 280 500 1100 1100
Pune 660 800 1000 560 840 450
Nashik 520 610 940 670 1060 660
Kolhapur 910 1020 1140 540 610 220
Latur 900 880 800 300 840 530

What should we do?

In the above problem the warehouses are not setup and we need
to setup those too. Each warehouse can handle 400 Pallets. The
cost of setting up a warehouse at each of the location is
given below (In Rupees Crores):
Warehouse Nagpur Pune Nashik Kolhapur Latur
Cost 1.25 1.2 0.8 1 0.9

What should we do?

Call Centre Scheduling
We are consulting for a call centre based out of Kahinaipur. It
specialises in insurance. The company has to schedule the
employees as per the demand. The company knows how many personnel
are required for a given call volume. The call volume keeps
fluctuating throughout the day and the company for ease of
operations evaluates it in four-hour intervals. The call centre
runs 24X7 and the demand on a typical day is as given below.
Time (24hr) Minimum Employees
required
0200 – 0600 20
0600 – 1000 50
1000 – 1400 80
1400 – 1800 100
1800 – 2200 40
2200 – 0200 30

The employees would come and join at the start of any slot, but
would continue for 8 hours (2 slots). We have to assist the call
centre in manpower planning and scheduling.
What should we do?