Project Management 3 Problems Assignment 2015

Project Management 3 Problems Assignment 2015

Question

Instructions: Answer each question. Use Lindo to solve all problems

Instructions: Answer each question. Use Lindo to solve all problems. Show all work by
describing variables,
stating assumptions, illustrating model and showing output solution to the
problem.Download Lindo/Lingo software to
solve all problems

1. Shale Oil
Company (20 pts)
Shale Oil, located on the
island of Aruba, has a capacity of 600,000 barrels of crude oil per day. The final products
from the refinery include
two types of unleaded gasoline; regular and premium. The refining process
encompasses four stages:

(1)
The pure crude flows through a distillation
tower that produces a feedstock

(2)
The feedstock output breaks up into two paths;
the first path involves feedstock flowing into a cracker unit that refines the
mixture into a gasoline stock. The
second path has a portion of the feedstock flowing into the blender unit.

(3)
The gasoline stock (from the cracker unit) feeds
into the blender.

(4)
The blender unit produces the final product,
regular or premium gasoline. Both the
regular and premium gasoline can be produced from either the feedstock or the
gasoline stock during the blending process, although at different production
costs. The company estimates that the
1/7
net profit per barrel of regular gasoline is $5.20 from feedstock and $7.70
from gasoline stock. The corresponding
profit values for the premium are $10.40 from the feedstock and $12.30 from the
gasoline stock. According to design
specifications, it takes five barrels of crude oil to produce one barrel of
feedstock. The cracker units cannot use
more than 40,000 barrels of feedstock per day.
All remaining feedstock is used directly in the blender unit to produce
the end product gasoline. The demand
limits for regular and premium gasoline are 80,000 and 50,000 barrels per day.

a.
Using Linear Programming, determine the optimum
production schedule for the refinery.
Allow for the solution variables to be in fractions (non integer)

b.
Suppose the capacity of the distillation tower
can be increased to 650,000 barrels per day at cost of $40,000. Is it worth making this
investment? (answer this question using sensitivity
analysis, stating shadow price, net profit or net loss and rationale. Extract all information
from the lindo output
used in part a). What would the new profit be for this investment? (Note, if it
is not worth the investment, enter 0 for the new profit value)

Problems Students
Answers

Problem 2a (Maximum Profit)

Problem 2b (Shadow price for

Additional Capacity)

Problem 2b (Is it worth the

investment?)

Problem 2b (New profit?, enter

value of 0 if there is no new profit )

2/7
2. Newcor Steel (25 pts) Newcor’s
steel mill has received an order for 25 tons of steel. The steel must be 5% carbon and 5%
molybdenum
by weight. The steel is manufactured by combining
three types of metals; steel ingots, scrap steel and alloys. Steel ingots can only be purchased in
lot
sizes of 1 at the specified weights given in the table below. The ingot can be cut to the desired
amount
needed in the process. The weight, cost
per ton and chemical contents of each ingot is:

INGOT WEIGHT COST PER

TON CARBON% MOLYBDENUM%

1 5 tons $350 5 3

2 3 tons $330 4 3

3 4 tons $310 5 4

4 6 tons $280 3 4

Unlimited amounts of alloys and scrap

steel can be purchased. Scrap steel cost
$100 per ton and contains 3% carbon and 9% molybdenum. The cost per ton and chemical
makeup of the
alloys is:

ALLOY COST PER TON CARBON% MOLYBDENUM%

1 $500 8 6

2 $450 7 7

3 $400 6 8

Determine the
3/7
appropriate mixture of the steel components to minimize the cost of
fulfilling the requirements.

Problems Answers

Problem 4 (Minimal Cost Value)

3.
First West Chemical Company (25 Points)
First West Chemical Company produces two chemical ingredients
for pharmaceutical firms; formula X and formula Y. Production of each
ingredient requires two processes. A unit of Formula X requires 4 hours in
process 1 and 3 hours in process 2. A unit in formula Y requires 2 hours in
process 1 and 5 hours in process 2. The
normal operating production times for the two processes are as follows: process
1, 70 hours and process 2, 60 hours. The production process of formula X
results in one unit of a by-product called XZ.
Four (4) units of X produce 1 unit of XZ. The production process for
formula Y yields 5 units of a by-product, YK for each unit of formula Y. The
unit profits for formulas X and Y are $10,000 and $15,000 respectively. By
products XZ yields $6000 unit profit. By product YK yields a $3000 unit profit
for up to 15 units. Because of the limited market and the danger involved in
handling the material, any by product YK in excess of 15 units must be
destroyed at a unit cost of $4,000. Also due to storage regulations, no more
than 15 units of Formula X can be produced.

The management at this chemical company has established the

following goals in order of importance:

1. Avoid any
underutilization of normal operation hours of each of the two processes.
Each of equal importance.
2. Meet the outstanding
orders for 8 units of formula X and 7 units of Formula Y. Each of equal
importance.
3. Limit any overtime
operation of each of the two production process to 10 hours. Each of equal
importance.
4. Achieve a profit goal
4/7
 of $220,000
5. Limit the production
of by-product YK to 15 units.
6. Minimize the overtime
operation of the production processes. Each of equal importance.

Formulate this problem into a mathematical model and determine

the solution that best satisfies these goals.

Problems Answers

Problem 5 -First Goal Achieved

(yes, no)

Problem 5 -Second Goal

Achieved (yes, no)

Problem 5 -Third Goal

Achieved (yes, no)

Problem 5 -Fourth Goal Achieved

(yes, no)

Problem 5 -Fifth Goal Achieved

(yes, no)

Problem 5 -Sixth Goal Achieved

(yes, no)

Problem 5 - Production amount of

Formula X at conclusion

Problem 5 - Production amount of

Formula Y at conclusion

5/7
Problem 5 - Production amount of
By Product YK at conclusion

Problem 5 - Production amount of

By Product XZ at conclusion

Problem 5 - Profit at conclusion

Project Management 3 Problems Assignment 2015

Attachments
Project_Management_3_Problems_Assignment_2015_Solution.docx (24.75 KB)

Preview: in xxxxxxx 1 xxx 3 hours xx process 2 x unit xx xxxxxxx Y xxxxxxxx 2 hours xx process
1 xxx 5 xxxxx xx process x The normal xxxxxxxxx production times xxx the xxx xxxxxxxxx are xx
follows: process xx 70 hours xxx process xx xx hours xxx production process xx formula X
xxxxxxx in xxx xxxx of x by-product called xx Four (4) xxxxx of x xxxxxxx 1 xxxx of XZ xxx
production process xxx formula x xxxxxx 5 xxxxx of a xxxxxxxxxxx YK for xxxx unit xx xxxxxxx Y
xxx unit profits xxx formulas X xxx Y xxx xxxxxxx and xxxxxxx respectively By xxxxxxxx XZ
yields xxxxx unit xxxxxx xx product xx yields a xxxxx unit profit xxx up xx xx units xxxxxxx of the
xxxxxxx market and xxx danger xxxxxxxx xx handling xxx material, any xx product YK xx excess
xx xx units xxxx be destroyed xx a unit xxxx of xxxxxx xxxx due xx storage regulations, xx more
than xx units xx xxxxxxx X xxx be produced xxx management at xxxx chemical xxxxxxx xxx
established xxx following goals xx order of xxxxxxxxxxx Avoid xxx xxxxxxxxxxxxxxxx of xxxxxx
operation hours xx each of xxx two xxxxxxxxx xxxx of xxxxx importance Meet xxx outstanding
orders xxx 8 xxxxx xx formula x and 7 xxxxx of Formula x Each xx xxxxx importance xxxxx any
overtime xxxxxxxxx of each xx the xxx xxxxxxxxxx process xx 10 hours xxxx of equal
xxxxxxxxxx Achieve x xxxxxx goal xx $220,000 Limit xxx production of xxxxxxxxxx YK xx xx
units xxxxxxxx

Project_Management_3_Problems_Assignment_2015_Sol.xlsx (27.51 KB)

Preview: 0 xxxxxxxxx Subproblems xxxxxxxxxx Max Integer xxxx Unlimited, Integer xxxxxxxxx
5%, xxxxx xxxxxxx Integer xxxxxxxxxxxx Assume NonNegativeObjective xxxx
(Max)CellNameOriginal ValueFinal xxxxxxxxxxxxx CellsIntegerConstraintsCell
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx

GET THE ANSWER>> https://solutionlly.com/downloads/project-management-3-problems-

6/7
 assignment-2015

7/7
Powered by TCPDF (www.tcpdf.org)