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Resource Optimization
Question
The following is a linear programming model for analyzing the product mix of Britonion
biscuit company, which produces three types of biscuits. In the model given below, xi
denotes the number of packets of biscuit type ito be produced.

Maximize Profit:
7 x1 +5 x2 +2 x 3
Subject to:
3x1 +5x2 + x3 ≤150 (Machine 1 Time )
5x1 + 3x2 + 2x3 ≤100 (Machine 2 Time )
x 1 +2x 2 + x 3≤160 ( Machine 3 Time)
x i≥0, i=1,2,3

The Solver solution to the model is as follows:

Microsoft Excel 10.0 Sensitivity Report
Report Created: 9/11/2007 11:17:58 PM

Adjustable Cells
Reduce
    Final d Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$4 Type 1 3.125 0 7 1.33 1.71
$C$4 Type 2 28.125 0 5 6.67 0.80
$D$4 Type 3 0 -0.75 2 0.75 1E+30

Constraints
    Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$E$5 Machine 1 Time 150 0.25 150 16.67 90
$E$6 Machine 2 Time 100 1.25 100 150 10
$E$7 Machine 3 Time 59.375 0 160 1E+30 100.625

(a) The maximum total profit that can be made is ________________________

(b) The binding constraints are ____________________________________

(c) The non-binding constraints are ________________________________ with a

slack of ____________________.
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(d) If the profit from biscuit 3 were increased to Rs. 2.70, the new optimal solution will
be __________________________ and the new optimal profit will be
___________

(e) If the capacity of machine 1 is increased to 160 the profit will be

___________________________.

(f) if the capacity of machine 2 is increased to 260 hours the profit will increase by at
least ____________________________

(g) If an additonal unit of machine time costs the same for all machines the priority
would be to provide additional hours to __________________ for a maximum
payment of _______________________ per hour.

Question
State whether the following are True or False

a) A feasible solution in a mathematical programming formulation of a decision

problem is one that satisfies all the constraints.

b) A decision problem that has infinite number of feasible solutions usually cannot
be solved.

c) Adding constraints to a decision model may sometimes improve the optimum

value of the objective function.

d) In a two-dimensional linear programming (LP) formulation, the objective function

can assume the same value at two distinct corner points.

e) The optimal solution for an LP model can lie anywhere in the feasible region.

f) The addition of a decision variable representing a new activity/product can

improve the optimal objective function value.

g) Redundant constraints do not play any role in defining the set of feasible solutions
in any way and can be deleted.
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Question
Consider the following LP problem:

Maximize Profit = 2x + 3y
Subject to:
x + 2y <= 5 (Resource 1)
x + y <= 4 (Resource 2)
y <= 2 (Resource 3)
x, y >= 0

The constraints are graphed below:

0 1 2 3 4 5 X

a) Indicate the feasible region on the graph by shading it.

Determine the optimal solution graphically

b) The optimal solution is ____________________________

c) The optimal objective function value is ____________________

d) In order to make higher profit you would increase resource(s) ________________

because ___________________________________________________

e) increasing resource(s) ___________________ will not give a higher profit

because _______________________________________________________

If the objective function is changed to: Profit = 2x + 4y

f) Give the optimal solution(s) ____________________________

If the objective function is changed to: Profit = 3x + 3y

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g) Give the optimal solution(s) ____________________________

Question

A shoe manufacturer produces hiking boots and ski boots. Its manufacturing process
consists of sewing and stitching. It has 120 hours per week for sewing process and 160
hours per week for the stitching process at normal capacity. It is possible to increase the
capacity through overtime. The profit for each pair of hiking boots is Rs. 300 and for Ski
boots it is Rs. 200. For hiking boots, 2 hours of sewing and 5 hours of stitching are
required. 3 hours of sewing and 2 hours of stitching are required for each pair of ski
boots. The president of the company wishes to achieve the following goals, listed in the
order of their importance (preemptive).

1. Achieve a profit goal of Rs. 10,500 per week.

2. Limit the overtime operation of the sewing process to 30 hours.

Formulate a goal programming model for the above problem assuming that both goals
listed above are equally important. Clearly define all the decision and deviation variables
and identify goal and system constraints.