1

IE 113A
OPERATIONS RESEARCH I

Lecture Notes #3

LP Model Formulation

IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012

 Applications of LP
2

The areas covered by these applications include the following:

1. Production Planning and Inventory Control

2. Blending and Mixtures
3. Manpower Planning
4. Urban Planning
5. Others

IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012

 Prod Planning and Inv. Control
3

In preparation for the winter season, a clothing company is

manufacturing parka and goose overcoats, insulated pants and
gloves. All products are manufactured in four different depts.:
cutting, insulating, sewing and packaging. The company has
received firm order for its products. The contract stipulates a
penalty for undelivered items. The following table provides the
pertinent data of the situation.

IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012

 Prod Planning and Inv. Control
4

Data Table.

IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012

 Manpower Scheduling
5

Progress City is studying the feasibility of introducing a mass

transit bus system that will alleviate the smog problem by
reducing in-city driving. The initial study seeks the determination
of the minimum number of buses that can handle the
transportation needs. After gathering necessary information, the
city engineer noticed that the minimum number of buses needed to
meet demand fluctuates with the time of the day. Studying the data
further, it became evident that the required number of buses can
be assumed constant over successive intervals of 4 hours each.
The following table summarizes the engineer's findings.

IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012

 Manpower Scheduling
6

IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012

 Urban Planning
7

The city of Erstville is faced with a severe budget shortage.

Seeking a long-term solution, the city council votes to improve the
tax base by condemning an inner-city housing area and replacing
it with a modern development. The project involves two phases:
(1) demolishing substandard houses to provide land for the new
development, and (2) building the new development. Based on the
summary of the situation (next slide), how many units of each
type should be constructed to maximize tax collection?

IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012

 Urban Planning
8

1. As many as 300 substandard houses can be demolished. Each house

occupies a 25-acre lot. The cost of demolishing a condemned house
is $2000.
2. Lot sizes for new single-, double-, triple-, and quadruple-family
homes (units) are .18, .28, .4, and .5 acre, respectively. Streets, open
space, and utility easements account for 15% of available acreage.
3. In the new development the triple and quadruple units account for at
least 25% of the total. Single units must be at least 20% of all units
and double units at least 10%.
4. The tax levied per unit for single, double, triple, and quadruple units
is $1,000, $1,900, $2,700, and $3,400, respectively.
5. The construction cost per unit for single-, double-, triple-, and
quadruple- family homes is $50,000, $70,000, $130,000, and
$160,000, respectively. Financing through a local bank can amount
to a maximum of $15 million.
IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012
 9

Questions?

IE 368.FACILITY DESIGN AND OPERATIONS MANAGEMENT WINTER 2012