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Quiz 2
Introduction to Management Science – Fall 2018
Attempt all problems. In mathematical formulations, clearly define your decision variables,
other notations, objective function, and constraints. A formulation or solution which is
rough or unclear to the examiner will not be marked.

Question 1: The stagecoach shipping company transports oranges from Los Angeles to St.
Louis. The different routes between Los Angeles and the destinations city and the length of
time, in hour, required by a truck to travel each route are shown.

Flow in forward direction only.

Node indexing:
 1 : Los Angeles
 2 :Salt Lake City
 3 : Phoenix
 4 : Denver
 5 : Des Moines
 6 : Dallas
 7 : St . Louis
The shipping company manger wants to determine the best route (in terms of the minimum
travel time) for the trucks to take to reach the destination. Formulate the problem using the
shortest route technique. [5 Marks]

SOLUTION:
Decision Variables:

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xij = Flow from node i to node j.

Objective Function:
Minimizetravel time=16 x 12+ 9 x 13 +35 x14 +12 x 24+25 x 25 +15 x 34 +22 x36 +14 x 45 +17 x 46 +19 x 47 +8 x 57 +14 x 67

Subject to the balance of flow constraints on:

Node 1: −x 12 −x 13−x14 =−1

Node 2: x 12−x 24−x 25=0

Node 3: x 13−x 34−x 36=0

Node 4: x 14+ x24 + x 34 −x 45−x 46 −x 47 =0

Node 5: x 25+ x 45− x57 =0

Node 6: x 36+ x 46−x 67=0

Node 7: x 47 + x 57+ x 67=1

x ij ≥ 0

Question 2: C-Fresh can send their farm citrus to their two processing plants (Plant A and
Plant B) in Mid country through climate control or regular containers. Climate control
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shipment costs $1.2/Kg to Plant A and $1.1/Kg to Plant B, while the regular container
shipment costs $1/Kg to Plant A and $0.90/Kg to Plant B. 2% is wasted in regular shipment
while 0.5% is wasted in climate controlled shipment. The company loses 1$/Kg wasted. Due
to the logistics contract, maximum 5000 Kg can be sent through climate controlled
containers, and 6000 Kg can be sent through regular containers. Plant A is new and incurs a
cost of $0.1 to process a kg, while Plant B incurs a cost of $0.15 per kg processed. Processing
adds 1% to the weight of citrus.
From the processing plant, the citrus is shifted to Cities A, B and C in the south; this time
only using regular containers. From Plant A it costs $1/Kg to ship to City A, $0.75/kg to ship
to City B, and $0.7/kg to ship to City C. From Plant B, it takes $0.8/kg, $0.7/kg, and $0.6/kg
to Ship to City A, City B and City C respectively. After processing, only 0.2% of the
shipment is wasted. Each city has a demand of 1000 Kg.
Formulate a network LP to minimize the total distribution and processing cost. [10 marks]

ANSWER

Decision Variables:

Let:

X ij =flow∈ Kgs ¿i ¿ j

Objective Function:

Minimize transportation and processing cost

Min Z=1.2 X 13 +1.1 X 14 +1 X 23+ 0.9 X 24+ 0.005 X 13 + 0.005 X 14 +0.02 X 23+ 0.02 X 24+ 0.1 ( 0.995 X 13+ 0.98 X 23 )+ 0

Subject to the balance of flow constraints

−X 13− X 14 ≥−5 K

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−X 23−X 24 ≥−6 K

1.1 ( 0.995 X 13+ 0.98 X 23 )− X 35−X 36− X 37 ≥ 0

1.1 ( 0.995 X 14 +0.98 X 24 ) −X 45− X 46− X 47 ≥ 0

0.998 X 35 +0.998 X 45 ≥ 1000

0.998 X 36 +0.998 X 46 ≥ 1000

0.998 X 37 +0.998 X 47 ≥ 1000

Sensitivity Analysis –
Problem:
Int.Wood produces wooden tables and chairs. The production process for each is similar in
that both require a certain number of labor hours in the carpentry department and a certain
number of labor hours in the painting department. Each table takes 3.2 hours of carpentry

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work, 4 hours of painting work, and 12 planks of wood. Each chair requires 5 hours of
carpentry, 1.6 hour of painting, and 10 planks of wood. During the current month, 2400 hours
of carpentry time and 1,000 hours of painting time are available. The wood planks for tables
and chairs are of different quality. Int.Wood can only procure 6,000 planks for tables and
10,000 planks for chairs. It is observed that all customers purchasing a table also buy two
chairs, however, chairs do sell separately (without a table). Each table sold results in a profit
contribution of Rs. 700, and each chair sold yields a profit contribution of Rs. 500.
Int.Wood’s problem is to determine the best possible combination of tables and chairs to
manufacture this month in order to attain the maximum profit.

Spreadsheet implementation and sensitivity report:

Question 3: Will the optimum solution change if the profit from a table is Rs. 750? [0.5
mark]

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No.
Question 4: What will be the impact on the objective function value if the profit from a chair
reduces to Rs. 420? [1 mark]
The objective function value will reduce to 235,215.36.
Question 5: Which constraints are binding? [0.5 mark]
Carpentry and painting.
Question 6: Assume that the marketing department wanted the number chairs to be at least
twice the number of tables plus 10 extra chairs to fulfill the backorders (earlier demand).
What will be the implication on the objective function value? [2 marks]
This means that the RHS of the ‘# of chairs and tables relation’ constraint is increased by 10.
The shadow price for the constraint remains 0 for this increase. Hence there will be no impact
on the objective function value for this change.
Question 7: What will be the impact of reducing the available painting hours to 700? [1
mark]
We don’t know. The reduction is more than the allowable decrease.

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