Logistics of the Leisure Air Problem

Pittsburgh Newark

Charlotte

Orlando Myrtle
Beach

Leisure Air owns two aeroplanes each with capacity of 132. One starts from Pittsburgh, flies
to Orlando with a stopover at charlotte, the other from Newark to Myrtle Beach via Charlotte.
Q class of tickets are those which are sold more 2 weeks before at lower price, and Y class
signifies the full fare ticket. Each Q class ticket sold in advance could lead to a loss of revenue,
if a Y class passenger is turned down at a later date. On the other hand, if a Q class customer
is declined and the flight eventually travels with an empty seat is also a loss of revenue.
How many tickets on each flight leg of each class should be sold by the airline?

ODIF Origin Destination Fare Class ODIF Code Fare Forecasted Demand
1 Pittsburgh Charlotte Q PCQ 178 33
2 Pittsburgh Myrtle Beach Q PMQ 268 44
3 Pittsburgh Orlando Q POQ 228 45
4 Pittsburgh Charlotte Y PCY 380 16
5 Pittsburgh Myrtle Beach Y PMY 456 6
6 Pittsburgh Orlando Y POY 560 11
7 Newark Charlotte Q NCQ 199 26
8 Newark Myrtle Beach Q NMQ 249 56
9 Newark Orlando Q NOQ 349 39
10 Newark Charlotte Y NCY 385 15
11 Newark Myrtle Beach Y NMY 444 7
12 Newark Orlando Y NOY 580 9
13 Charlotte Myrtle Beach Q CMQ 179 64
14 Charlotte Myrtle Beach Y CMY 380 8
15 Charlotte Orlando Q COQ 224 46
16 Charlotte Orlando Y COY 582 10
 Hiring and Training at Feeder-Service Airlines
The Feeder-Service Airlines Company must decide how many new female flight attendants to
hire and train over the next six months. The requirements expressed as the number of female
attendant-flight-hours needed are 8000 in January; 9000 in February; 8000 in March, 10,000
in April; 9000 in May; and 12,000 in June.

It takes one month of training before a flight attendant can be put on a regular flight; so an
employee must be hired at least a month before she is actually needed. Also, a trainee
requires 100 hours of supervision by experienced female flight attendants during the month
of training so that 100 less hours are available for flight service by regular flight attendants.

Each experienced flight attendant can work up to 150 hours in a month, and Feeder-Service
has 60 regular female flight attendants available at the beginning of January. If the maximum
time available from experienced flight attendants exceeds a month's flying and training
requirements, then they are laid off. Those that are laid off in a month are not available for
rehiring in later months. Each month, approximately 10% of the experienced female flight
attendants quit their jobs to be married or for other reasons.

An experienced flight attendant costs the company Rs. 40000 and a trainee Rs. 15000 a month
in salary and other benefits.
 Multistage Problem
An automobile tyre company has the ability to produce both nylon and fibreglass tyres. The
company has two presses, a Wheeling machine and a Regal machine. Any machine can be
used to produce any tyre. The production hours available in the next three months is given
below. During the next three months, they have agreed to deliver the tyres as follows:

MONTH AVAILABLE HOURS DELIVERY REQUIRED

Wheeling Regal Nylon Fibreglass

JUNE 700 1500 4000 1000

JULY 300 400 8000 5000

AUGUST 1000 300 3000 5000

The production rate for each machine-tyre combination is as follows:

TYRE WHEELING REGAL

NYLON 0.15 0.16

FIBREGLASS 0.12 0.14

The variable cost of producing tyres are Rs. 2500 per operating hour, regardless of which
machine is used or which tyre is produced. The inventory carrying costs are Rs. 50 per month.
Material costs for the nylon and fibreglass tyres are Rs. 1550 and Rs. 1959 respectively.
Finishing and packaging and shipping costs are Rs. 115 per tyre. Prices have been set at Rs.
3500 per nylon tyre and Rs. 4500 per fibreglass tyre.

1. What should be the production schedule for the three months so as to maximize the
profit?

2. A new Wheeling machine is due in September. At a cost of Rs. 100,000, it would be

possible to expedite its arrival to August, making available 172 additional hours of
wheeling machine in August. Should it be expedited?
 Capital Budgeting at Agrico Inc.
AGRICO INC. is a fairly large size firm that specializes in the manufacture and sale of
agriculture related heavy equipment. The board of directors of AGRICO INC. are faced with a
capital budgeting decision problem as summarized in Table 1 below. As shown in the table,
they have four investment alternatives to choose from. The dollar amounts reported in this
table are in thousands. Clearly, the board wishes to maximize the present value of total
return, while ensuring that the capital requirements are met with what is available.

Capital Required in Year by Alternative Present Value of

($000s) Net Return ($000s)
Alternative 1 2 3 4 5
Expand Indian Plant 100 50 200 100 0 400
Expand Capacity in US 300 200 100 100 100 700
Build New Plant in Chile 100 200 270 200 100 800
Build New Plant in US 200 100 400 200 200 1000
Capital Available for Each Year 500 450 700 400 300

ADDITIONAL CONSTRAINTS
I. Choose exactly 2 projects.
II. Choose no more than 3 projects.
III. Cannot take project 4 unless project 3 is taken.
IV. Must take both 1 and 2 or neither.
V. Can take #1 if either 3 or 4 is taken.
VI. Can take #1 only if both #3 and #4 are taken.
 Orion’s Contracts Problem
Orion, a computer manufacturer plans to award contracts for the supply of 50,000 RAM units.
Three subcontractors have submitted bids. Of these, subcontractor 1 represents an
international firm and subcontractors 2 and 3 represent domestic firms. The manufacturer
also wants to ensure that the order must be placed with at least one domestic firm.

 Subcontractor 1 can supply any amount and offers the following discount structure:

Quantity Price (Rs/unit)

0 - 10,000 1000
10,001 - 20,000 800
20,001 - 30,000 600
30,001 - 40,000 500
 40,000 400

 Subcontractor 2 will supply no more than 20,000 units at a unit price of Rs 800 per unit.
 Subcontractor 3 will supply no less than 30,000 units at a unit price of Rs 680 per unit.

Can this problem be formulated as an LP or an ILP? Give the appropriate formulation.

 Advertisement Decisions at Big Bucks
The Big Bucks Placements Company wants to decide on which advertising media to use. Its
target is to reach 20,000 people at minimum advertising cost. The media through which it
may advertise are three different weekly magazines. Fixed Costs of developing an
advertisement for the three magazines are Rs. 15000, Rs. 20,000 and Rs. 25000 respectively.
Cost of advertising is given on the basis of column length of the advertisement and is Rs.
200, Rs. 180 and Rs. 230 per column cm. respectively. The number of people that can be
reached by the three magazines depends on the length of the advertisement and is as
follows:

Magazine 1: 300*column length

Magazine 2: 250*column length
Magazine 3: 500*column length

Maximum length of the advertisement is to be restricted to 30cm.

Assuming independence of readership, determine the advertisement plan to attain the

targeted reach at minimum cost.
 Cutting Stock Problem
Paper making – deckle width determines the width of the paper produced.
Suppose, deckle’s width is 20 feet.

Requirement:
Roll of width 9' and 7,000' long
Roll of width 7' and 12,000' long
Roll of width 5' and 9,000' long
Extra width and length produced is a waste.
What should be the cutting pattern which will minimise the trim waste?