Queen’s College

MBA PROGRAM
Quantitative analysis for management decision group assignment
1. A finished product weighs exactly 150grams. The two raw materials used in manufacturing the product
are A, with cost of birr 2 per unit and B with a cost of birr 8 per unit. At least 14 units of B and not more
than 20 units of A must be used. Each units of A and B weighs 5 and 10 grams respectively.
a. Formulate the above problem as a linear programing model
b. Obtain optimal solution to the problem by using the simplex method, how much of each type of row
material should be used for each unit of the final product in order to minimize the cost?
C. Determine the surplus amount if any
2. Solve graphically
Maximize Z= 10X1+ 15X2
Subject to
2X1+ X2 ≤ 26
2X1+ 4X2≤ 56
X1- X2 ≥ -5
X1 X2 ≥ 0
3. Ashok Chemicals Company manufactures two chemicals. A and B which are sold to the manufacturers
of soaps and detergents. On the bases of the next moths demand, the management has decided that the
total production for chemicals A and B should be at least 350 kilogram. Moreover, a major customers
order for 125kilograms of product A must also be supplied. Product A requires two hours of processing
time per kilogram and product B requires one hours of processing time per kilogram. For the coming
month 600 hours of processing time are available.
The company wants to meet the above requirements at a minimum total production costs. The production
costs are birr 2 per kilogram for product A and birr 3 per kilogram for product B. Ashok chemicals
company wants to determine its optimal product mix and the total minimum cost relevant there to.
a. Formulate the above as a linear programing model
b. Solve the problem with the simplex method
c. Does the problem have multiple optimal solutions? Why?

4. Solve graphically the following linear programing problem

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 Minimize Z= 3X1+ 5X2
Subject to
-3X1+ 4X2≤ 12
2X1+ 3X2 ≥ 12
2X1-X2 ≥ -2
X1≤ 4, X2 ≥ 2
X1, X2 ≥ 0
5. A firm uses three machines in the manufacture of three products. Each unit of product A requires 3
hours on machine I, two hours on machine II, and one hour on machine III. While each unit of product B
requires four hours on machine I, one hour on machine II, and three hours on machine III. While each
unit of product C requires two hours on each of the three machines. The contribution margin of the three
products is birr 30, birr 40 and birr 35 per unit respectively. The machine hours available on the three
machines are 90, 54, and 93 respectively.
a. Formulate the above problem as a linear programing model
b. Obtain optimal solution to the problem by using the simplex method. Which of the three products
shall not by produced by the firm? Why?
c. Calculate the un used capacity if any
d. What are the shadow prices of the machine hours?
6. Solve using simplex method
Maximize Z= 6X1 + 20X2
Subject to
2X1 + X2≤ 32
3X1 + 4X2 ≤ 80
X1 ≥8
X1, X2 ≥0
7. A company produces three products P1,P2 and P3 from two raw materials A and B, and lobar L. one
unit of product P1 requires one unit of A, three unit of B, and two units of L. one unit of product P2
requires 2 unit of A and B each, three unit of L, while one unit of P3 needs two unit of A six unit of B
and four unit of L. the company has a daily available of 8 unit of A, 12 unit of B and 12 unit of L. it is
further known that the unit contribution margin for the product is birr 3,2 and 5 respectively for P1, P2
and P3.
a. Formulate the above problem as a linear programing model
b. Obtain optimal solution to the problem by using the simplex method. Which of the three products shall
not by produced by the firm? Why?
c. Calculate the unused capacity if any
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 d. What are the shadow prices of the raw materials and labor?
8. Solve this cost minimization problem for the optimal solution:
Minimize Z= 20X1 + 12X2 + 16X3
Subject to
X1 +X2 ≥ 25
X2- X3 = 0
X3 ≥ 5
X1, X2, X3≥ 0
9. A timber merchant manufactures three types of plywood. The data below give the production hours per
unit in each of three production operations, maximum time available and profit per unit.
Plywood Operation (hours) Profit per
I II III unit

Grade A 2 2 4 40

Grade B 5 5 2 30

Grade C 10 3 2 20

Maximize 900 400 600

time
available
a. Formulate the above problem as a linear programing model
b. Obtain optimal solution to the problem by using the simplex method.
c. Write the dual and use it to check the optimal solution
10. Solve graphically the following LPP
Minimize Z= 4X1 + 3X2
Subject to
X1 +3X2≥ 9
2X1+ 3X2≥ 12
X1 + X2≥ 5
X1, X2≥ 0
11. Cookwell, a manufacturer of large size pressure cookers, produces and sells three models of cookers.
While market demands pose no restriction, the capacity to produce is currently constrained by the limited
supplies of special grade aluminum limited to 1500kg per week and machine processing time limited to
1200 hours per week. In order to determine the optimal product mix to maximize weekly contribution, a
linear programming model as under was formulated.
Maximize Z= 60X1+ 40X2+ 80X3
Subject to

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 6X1+ 3X2+ 5X3 ≤1500 (aluminum)
3X1+ 4X2+ 5X3 ≤1200 (machine hours)
X1, X2, X3≥0
Using the simplex method, the following tableau was obtained
Basic V Cj 60 40 80 0 0 quantity

X1 X2 X3 S1 S2

X1 1 -1/3 0 1/3 -1/3 100

X3 0 1 1 -1/5 2/5 180

Zi _ _ _ _ _ _

Cj-Zi _ _ _ _ _ _

a. Fill in all the numerical values in the above table.

b. Is the current solution is optimal? If not, carry out the iterations until an optimal solution is
reached.
c. Analyze the sensitivity of the optimal solution to the following changes.
I) Due to a machine breakdown, the machine hours available gets reduced to 1050 hours.
II) An additional quantity of 150 kg of aluminum can be obtained
III) The second model does not feature in the current optimal solution. What should be the
minimum amount increase in unit contribution on this model for this to feature in the
optimal solution?
12. Solve graphically the following LPP
Maximize Z= 10X1 + 8X2
Subject to
2X1 + X2 ≤ 20
X1 + 3X2 ≤ 30
X1 – 2X2 ≥ -15
X1, X2 ≥ 0
13 The simplex tableau for a maximization problem of linear programming is given here:

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 Basic V Cj 4 5 0 0 Quantity
X1 X2 S1 S2

X2 1 1 1 0 10
S2 1 0 -1 1 3

Zi _ _ _ _ _
Cj-Zi _ _ _ _ _

Answer the following question, giving a reason in brief:

a. Fill in all the numerical values in the above table.
a. Is the current solution is optimal? If not, carry out the iterations until an optimal solution is
reached.
b. If S1 is slack in machine A and S2 is slack in machine B, which of these machines is being used to
the full capacity when producing according to this solution?
c. A customer would like to have one unit product X1 and willing to pay in excess of the normal
price in order to get it. How much the price should be increased in order to ensure no reduction of
profit?
d. Haw many units of the two products X1 and X2 are being produced according to this solution and
what is the profit?
e. Machine A has to be shut down for repairs for 2 hours next week. What will be the effect on
profits?
f. A new product is proposed to be introduced which would require processing time of ½ hours on
machine A and 20 minutes on machine B. it would yield a profit of birr 3 per unit. Do you think it
is advisable to introduce this products

14 Solve graphically the following LPP

Maximize Z = X1 + 3X2
Subject to
X1 + 2X2 ≤ 9
X1 + 4X2 ≤ 11
X1 – X2 ≥ 2
X1, X2 ≥ 0

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 15 A company has facilitates for producing 5 products which require the same raw material and the
same type of production, finishing and packaging facilities. The unit contribution margin and the
material and labor requirements for each of the products are given here.

Product Contribution margin Raw material (kg) Labor hours Labor hours finishing
production &production

P1 150 10 10 30

P2 120 10 20 20

P3 160 20 10 20

P4 160 30 10 20

P5 100 20 20 10

Total available 50 80 140

(000)

The manager of the company insists that the products P3 and P4 should be given top priority in the
production, because they yield the maximum contribution.
a. Formulate the above problem as a linear programing model
b. Write the dual of this problem
16 Solve the following LPP using simplex method
Minimize Z = 100X1 + 80X2 + 10 X3
Subject to
100 X1 + 7X2 +X3 ≥ 30
120X1+ 10X2 +X3 ≥ 40
70X1 + 8X2 +X3 ≥ 20
X1, X2, X3 ≥ 0
17 A retired person wants to invest up to an amount of birr 30000 in fixed income securities. His broker
recommends investing in two bonds. Bond A yielding 7% and bond B yielding 10%. After some
confederation, he decides to invest at most birr 12,000 in bond B and at least birr 6000 in bond A. he
also wants the amount invested in bond A to be at least equal to the amount invested in bond B.
a. Formulate the above problem as a linear programing model
b. Obtain optimal solution to the problem. What should the broker recommended if the investor
wants to maximize his return on investment? (solve graphically)
18 Solve the following LPP using simplex method
Maximize Z= 10X1 + 20X2
Subject to
2X1+5X2≥50

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 4X1 + X2 ≤ 28
X1, X2 ≥ 0
19 A local travel agent is planning a charter trip to a major sea port. The eight day/seven night package
includes the fare for round trip, surface transportation, board and lodging and selected tour options. The
charter trip is restricted to 200 persons and the past experience indicates that there will not be any
problem for getting 200 clients. The problem for the travel agent is to determine the number of deluxe,
standard and economy tour packages to offer for this charter. These three plans differ according to
seating and service for the flight, quality of accommodations, meal plans and tour options. The
following table summarizes the estimated prices for the three packages and the corresponding expenses
for the travel agent. The travel agent has hired an aircraft for the flat fee of birr 200,000 for the entire
trip.

Tour plan Price Hotel costs Meal and other expenses

Deluxe 10,000 3,000 4,750

Standard 7,000 2,200 2,500

Economy 6,500 1,900 2,200

In planning the trip, the following consideration must be taken in to account.

i) At least 10% of the packages must be of the deluxe
ii) At least 35% but not more than 70% must be of the standard type.
iii) At least 30% must be of the economy type.
iv) The maximum number of deluxe and a package available in any aircraft is restricted to 60.
v) The hotel desires that at least 120 of the tourists should be on the deluxe and standard
packages taken together.
The travel agent wishes to determine the number of packages to offer in each type so as to maximize the
total profit.
a. Formulate this as a linear programming problem
b. Restate the above LPP in terms of two decision variables, taking advantage of the fact that 200
packages will be sold
c. Find the optimal solution using graphical method for the restated problem and interpret
20 Solve the following LPP using simplex method
Maximize Z = 5X1 + 2X2 + 10 X3
Subject to
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 X1 -X3 ≥ 10
X2 - X3 ≥ 10
X1 +X2 +X3≤10
X1+, X2, X3 ≥ 0
21 A wood products firm uses leftover time at the end of each week to make goods for stock. Currently,
there are two products on the list of item that are produced for stock: a chopping board and a knife
holder. Both items require three operations: cutting, glueing, and finishing. The manager of the firm has
collected the following data on these products:

Time per unit (minutes)

Item Profit/unit Cutting Glueing Finishing

Chopping board $2 1.4 5 12

Knife holder $6 .8 13 3

The manager also determined that during each week 56 minutes are available for cutting 650 minutes are
available for glueing, and 360 minutes are available for finishing.

a. Formulate the above problem as a linear programing model

b. Determine the optimal quantities of the decision variable

c. Which resources are not completely used by your solution? How much of each resource is
unused?

22 Solve the following LPP using simplex method

Minimize Z = -4X1 + 3X2
Subject to
X1 - 2X2 ≥ -4
2X1+ 3X2 ≥ 13
X1- X2 ≥ 4
X1, X2 ≥ 0
23 A furniture manufacturer produces two types of desks: standard and executive these desks are sold to an
office furniture wholesaler, and for all practical purposes, there is an unlimited market for any basic
operations: cutting of the lumber, joining of the pieces, pre-finishing, and final finish. Each unit of the
standard desk produced takes 48 minutes of cutting time, 2 hours of joining, 40 minutes of pre-finishing,
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 and 5 hours and 20 minutes of final finish time. Each units of the executive desk requires 72 minutes of
cutting time, 3 hours of joining, 2 minutes of pre-finishing, and 4 hours of final finish time. The daily
capacity for each operation amounts to 16 hours cutting time, 30 hours of joining, 16 hours of pre-
finishing, and 64 hours of final finish time. The profit per unit produced is birr 40 for the standard desk
and birr 50 for the executive desk.

a. Formulate the above problem as a linear programing model

b. Obtain optimal solution to the problem and determine the product mix that maximizes total
revenue, the total profit. (use graphical method)
c. Determine the unused capacity if any
24 Solve the following LPP using simplex method
Maximize Z = 2X1 + 4X2
Subject to
2X1+X2≤18
3X1+ 2X2 ≥ 30
X1+ 2X2=25
X1, X2 ≥ 0
Note that
Attempt questions based on the last digit of your ID number

Question Group number

number
1,21,3,23 Group 1
5,2,7,4 Group 2
9,6, 11,8 Group 3
13,10,15,12 Group 4
17,14,16, 19, Group 5