GBA 334 Module 7 Practice Problem Solutions

Chapter 10 Problem 36

Let: X1 = number of coconuts carried

X2 = number of skins carried

Maximize profit = 60X1 + 300X2 (in rupees)

Subject to: 5X1 + 15X2  300 pounds

1
X1 + 1X2  15 cubic feet
8
X1, X2  0
At point a: (X1 = 0, X2 = 15), P = 4,500 rupees

At point b: (X1 = 24, X2 = 12), P = 1,440 + 3,600

= 5,040 rupees

At point c: (X1 = 60, X2 = 0), P = 3,600 rupees

The three princes should carry 24 coconuts and 12 lions’ skins. This will produce a
wealth of 5,040 rupees.
Chapter 10 Problem 39

a. Let: X1 = number of pounds of stock X purchased per cow each month

X2 = number of pounds of stock Y purchased per cow each month
X3 = number of pounds of stock Z purchased per cow each month

Four pounds of ingredient A per cow can be transformed to:

4 pounds  (16 oz/lb) = 64 oz per cow
5 pounds = 80 oz
1 pound = 16 oz
8 pounds = 128 oz
3X1 + 2X2 + 4X3  64 (ingredient A requirement)
2X1 + 3X2 + 1X3  80 (ingredient B requirement)
1X1 + 0X2 + 2X3  16 (ingredient C requirement)
6X1 + 8X2 + 4X3  128 (ingredient D requirement)
X3  5 (stock Z limitation)

Minimize cost = $2X1 + $4X2 + $2.50X3

b. Cost = $80
X1 = 40 lbs. of X
X2 = 0 lbs. of Y
X3 = 0 lbs. of Z

Chapter 11 Problem 16

a. Using the northwest corner rule for the Saussy Lumber Company data, the following
initial solution is reached:

To Customer Customer Customer

FROM 1 2 3 Capacity
3 3 2
Pineville 25 25
4 2 3
Oak Ridge 5 30 5 40
3 2 3
Mapletown 30 30
Demand 30 30 35 95

Initial cost = 25($3) + 5($4) + 30($2) + 5($3) + 30($3)

= $260
b. Applying the stepping-stone method, the improvement indices are computed:

best  Pineville–Customer 2 = +$3  2 + 4  3 = +$2

 Pineville–Customer 3 = +$2  3 + 4  3 = $0
 Mapletown–Customer 1 = +$3  3 + 3  4 = $1
improvement 
 Mapletown–Customer 2 = +$2  3 + 3  2 = $0
index 


The improved solution is shown in the following table. Its cost is $255.

To Customer Customer Customer

FROM 1 2 3 Capacity
3 3 2
Pineville 25 25
4 2 3
Oak Ridge 30 10 40
3 2 3
Mapletown 5 25 30
Demand 30 30 35 95

Checking improvement indices again, we find that this improved solution is still not op-
timal. The improvement index for the Pineville–Customer 3 route = +$2  3 + 3  3 =
$1. Hence another shift is necessary. The third iteration is shown in the following table:

To Customer Customer Customer

FROM 1 2 3 Capacity
3 3 2
Pineville 0 25 25
4 2 3
Oak Ridge 30 10 40
3 2 3
Mapletown 30 0 30
Demand 30 30 35 95

The cost of this solution is $230. Since two squares went to zero simultaneously in this
last table, the solution has become degenerate. However, an examination of improve-
ment indices reveals that this current solution is optimal.
Chapter 11 Problem 32

To determine which new plant will yield the lowest cost for Ashley in combination with
the existing plants, we need to solve two transportation problems. We begin by setting
up a transportation table that represents the opening of the third plant in New Orleans
(see the table). The northwest corner method is used to provide an initial solution. The
total cost of this first solution is seen to be $23,600. You should note that the cost of
each individual “plant to distribution center” route is found by adding the distribution
costs to the respective unit production costs. Thus the total production plus shipping
cost of one auto top carrier from Atlanta to Los Angeles is $14 ($8 for shipping plus $6
for production).

Table for Chapter 11 Problem 32

TO Production
FROM Los Angeles New York Capacity
$14 $11
Atlanta
600 600
$9 $12
Tulsa
200 700 900
$9 $10
New Orleans
500 500
Demand 800 1,200 2,000

Total cost = (600 units  $14) + (200 units  $9) + (700 units  $12) + (500 units  $10)
= $8,400 + $1,800 + $8,400 + $5,000
= $23,600

Is this initial solution optimal? We once again employ the stepping-stone method to test
it and to compute improvement indices for unused routes.

Improvement index for Atlanta to New York route:

+$11 (Atlanta to New York)
$14 (Atlanta to Los Angeles)
+$9 (Tulsa to Los Angeles)
$12 (Tulsa to New York)
= $6

Improvement index for New Orleans to Los Angeles route:

+$9 (New Orleans to Los Angeles)
$10 (New Orleans to New York)
+$12 (Tulsa to New York)
$9 (Tulsa to Los Angeles)
= +$2
Since the firm can save $6 for every unit it ships from Atlanta to New York, it will want to
improve the initial solution and send as many as possible (600 in this case) on this cur-
rently unused route.
 TO Production
FROM Los Angeles New York Capacity
$14 $11
Atlanta
600 600
$9 $12
Tulsa
800 100 900
$9 $10
New Orleans
500 500
Demand 800 1,200 2,000

You may want to confirm that the total cost is now $20,000, a savings of $3,600 over
the initial solution.

Again, we must test the two unused routes to see if their improvement indices are nega-
tive numbers.

Index for Atlanta to Los Angeles

= +$14  $11 + $12  $9 = +$6

Index for New Orleans to Los Angeles

= +$9  $10 + $12  $9 = +$2

Since both indices are greater than zero, we have reached an optimal solution. If Ash-
ley selects to open the New Orleans plant, the firm’s total distribution system cost will
be $20,000. If the Houston plant site is chosen, the initial solution is as follows:

TO
FROM Los Angeles New York Capacity
$14 $11
Atlanta
600 600
$9 $12
Tulsa
200 700 900
$7 $9
Houston
500 500
Demand 800 1,200 2,000

Total cost of initial solution

= $8,400 + $1,800 + $8,400 + $4,500
= $23,100

Improvement index for Atlanta to New York

= +$11  $14 + $9  $12
 = $6

Improvement index for Houston to Los Angeles

= +$7  $9 + $12  $9
= +$1

The improved solution by opening Atlanta to New York route is shown below.
TO Production
FROM Los Angeles New York Capacity
$14 $11
Atlanta
600 600
$9 $12
Tulsa
800 100 900
$7 $9
Houston
500 500
Demand 800 1,200 2,000

Total cost of improved solution = $19,500.

Improvement indices for Atlanta to New York and Houston to Los Angeles routes are
both positive at this point. Hence an optimal solution has been reached. Upon compar-
ing total costs for the Houston option ($19,500) to those for the New Orleans option
($20,000), we would recommend to Ashley that all factors being equal, the Houston site
should be selected.

Chapter 11 Problem 42

Assignment Rating
Hawkins to cardiology 18
Condriac to urology 32
Bardot to orthopedics 24
Hoolihan to obstetrics 12
Total “cost scale” 86