PINEDA, MARICAR R.

CBET-01-601E

The JPC Furniture Company has an ordered for 100 of its narra chairs. The
chairs can be produced in two ways. One way is for JPC to produce chair parts in its
own shop at a cost of P250 per set of chair parts and use 20 minutes of grade 3 labor to
assemble each chair. Grade 3 labor is paid P18.00 per hour. The other way for filling
the order is to purchase only parts of the chair from a competitor at a cost of P300 per
set of chair parts and JPC used 15 minutes of grade 2 labor to assemble each chair.
Grade 2 labor earns P20 per hour. The order must be finished during the next 10 days.
If JPC orders the chair part from the competitor he must order at least 50 set of parts.
Twenty (20) hours of the two grades of labor could be available at the time for
assembly. Using simplex method, determine the best combination of chairs produced
entirely by JPC (X1) and chairs only assemble by JPC (X2) that will minimize cost.

Produced (X1) Purchased (X2) Total

Labor 20 mins.
Grade 3 1,200
Grade 2 15 mins. 1,200
Parts 50 chairs
Narra chairs 100
Cost (Parts) P250 P300
Cost (Labor) P6 P5
Total Cost P256 P305

Objective Function:
Minimize: C = 256X1 + 305X2
Subject to:
20X₁ ≤ 1200 X1 ≥ 0 ; X2 ≥ 0
15X2 ≤ 1,200
X2 ≥ 50
X1 + X2 = 100
Convert:
20X1 + S1 = 1,200
15X2 + S2 = 1,200
X2 - S3 + A2 = 50
X1 + X2 + A1 = 100

Modify:
C = P256X1 + P305X2 + P0S1 + P0S2 + P0S3 + PmA1 + PmA2
1200 = 20X1 + S1 + 0S2 + 0S3 + 0A1 + 0A2
1200 = 15X2 + 0S1 + S2 + 0S3 + 0A1 + 0A2
50 = X2 + 0S1 0S2 – S3 + 0A1 + A2
100 = X1 + X2 + 0S1 + 0S2 + 0S3 + A1 + 0A2

FIRST SOLUTION:

Cj 256 305 0 0 m m
S
PM Qty X1 X2 1 S2 A1 A2
Lowest
0 S1 50 1 0 1 0 0 0 undefined
positive
m A1 50 0 1 0 -1 1 0 50 →
quotient
m A2 100 1 1 0 0 0 1 100
150
Zj m m 2m 0 -m m m
Cj - Zj 256-m 305-2m 0 -m m m

Replacing row (A1) = Same values IE = 1

Remaining row (S1) = Same values IE = 0
SECOND SOLUTION:

30
Cj 256 5 0 0 m m
P S A
M Qty X1 X2 1 S2 1 A2
A2 row

0 S1 1,200 20 0 1 0 0 0 60
100 - 1(50) = 50
1 – 1 (0) = 1
undefine
1 – 1 (1) = 0
305 X2 50 0 1 0 -1 1 0 d
0 – 1 (0) = 0
50
0 – 1 (-1) = 1
m A2 1 0 0 1 -1 1 50 →
0 – 1 (1) = -1
15,250+50 30 1 – 1 (0) = 1
Zj m m 5 0 m-305 m m
Cj -
Zj 256-m 0 0 305-m 0 0

Replacing row (A2) = Same values IE = 1

Remaining row (X2) = Same values IE = 0

THIRD SOLUTION:

Cj 256 305 0 0 m m
PM Qty X1 X2 S1 S2 A1 A2 S1 row

0 S1 0 0 0 0 -1 1 -1 50 - 1(50) = 0
1 - 1(1) = 0
305 X2 50 0 1 0 -1 1 0
0 - 1(0) = 0
0 - 1(0) = 0
256 X1 50 1 0 0 1 -1 1 1 - 1(1) = 0
Zj 28,050 256 305 0 -49 49 256 -1 - 1(-1) = 0
Cj - Zj 0 0 0 -49 m-49 m-256 1 - 1(1) = 0
Optimum Solution:

The combination of chairs must contain:

X2 50 chairs
X1 50 chairs
Cost P28,050