Chapter 1 - The Clean Clothes Corner Laundry

When Molly Lai purchased the Clean Clothes Corner Laundry, she thought that because it was in a good
location near several high-income neighborhoods, she would automatically generate good business if
she improved the laundry’s physical appearance. Thus, she initially invested a lot of her cash reserves in
remodeling the exterior and interior of the laundry. However, she just about broke even in the year
following her acquisition of the laundry, which she didn’t feel was a sufficient return, given how hard she
had worked. Molly didn’t realize that the dry-cleaning business is very competitive and that success is
based more on price and quality service, including quickness of service, than on the laundry’s
appearance.

In order to improve her service, Molly is considering purchasing new dry-cleaning equipment, including a
pressing machine that could substantially increase the speed at which she can dry-clean clothes and
improve their appearance. The new machinery costs $16,200 installed and can clean 40 clothes items
per hour (or 320 items per day). Molly estimates her variable costs to be $0.25 per item dry-cleaned,
which will not change if she purchases the new equipment. Her current fixed costs are $1,700 per
month. She charges customers $1.10 per clothing item.

A. What is Molly’s current monthly volume?

- Total cost= vcv+cf ; v=quantity, cv= variable cost per unit, cf= fixed cost
Cost of new equipment= 16,200; 40 items/hr or 320 items/day
Variable cost = .25/item
Fixed cost= 1,700
Charge/item= 1.10
B. If Molly purchases the new equipment, how many additional items will she have to dry-clean
each month to break even?

C. Molly estimates that with the new equipment she can increase her volume to 4,300 items per
month. What monthly profit would she realize with that level of business during the next 3
years? After 3 years?

-
D. Molly believes that if she doesn’t buy the new equipment but lowers her price to $0.99 per item,
she will increase her business volume. If she lowers her price, what will her new break-even
volume be? If her price reduction results in a monthly volume of 3,800 items, what will her
monthly profit be?

E. Molly estimates that if she purchases the new equipment and lowers her price to $0.99 per
item, her volume will increase to about 4,700 units per month. Based on the local market, that is
the largest volume she can realistically expect. What should Molly do?
Chapter 2 - Metropolitan Police Patrol

The Metropolitan Police Department was recently criticized in the local media for not responding to
police calls in the downtown area rapidly enough. In several recent cases, alarms had sounded for break-
ins, but by the time the police car arrived, the perpetrators had left, and in one instance a store owner
had been shot. Sergeant Joe Davis was assigned by the chief as head of a task force to find a way to
determine the optimal patrol area (dimensions) for their cars that would minimize the average time it
took to respond to a call in the downtown area.

Sergeant Davis solicited help from Angela Maris, an analyst in the operations area for the police
department. Together they began to work through the problem.

Joe noted to Angela that normal patrol sectors are laid out in rectangles, with each rectangle including a
number of city blocks. For illustrative purposes he defined the dimensions of the sector as x in the
horizontal direction and as y in the vertical direction. He explained to Angela that cars traveled in straight
lines either horizontally or vertically and turned at right angles. Travel in a horizontal direction must be
accompanied by travel in a vertical direction, and the total distance traveled is the sum of the horizontal
and vertical segments. He further noted that past research on police patrolling in urban areas had shown
that the average distance traveled by a patrol car responding to a call in either direction was one-third of
the dimensions of the sector, or x/3x/3 and y/3y/3. He also explained that the travel time it took to
respond to a call (assuming that a car left immediately on receiving the call) is simply the average
distance traveled divided by the average travel speed.

Angela told Joe that now that she understood how average travel time to a call was determined, she
could see that it was closely related to the size of the patrol area. She asked Joe if there were any
restrictions on the size of the area sectors that cars patrolled. He responded that for their city, the
department believed that the perimeter of a patrol sector should not be less than 5 miles or exceed 12
miles. He noted several policy issues and staffing constraints that required these specifications. Angela
wanted to know if any additional restrictions existed, and Joe indicated that the distance in the vertical
direction must be at least 50% more than the horizontal distance for the sector. He explained that laying
out sectors in that manner meant that the patrol areas would have a greater tendency to overlap
different residential, income, and retail areas than if they ran the other way. He said that these areas
were layered from north to south in the city, so if a sector area was laid out east to west, all of it would
tend to be in one demographic layer.

Angela indicated that she had almost enough information to develop a model, except that she also
needed to know the average travel speed the patrol cars could travel. Joe told her that cars moving
vertically traveled an average of 15 miles per hour, whereas cars traveled horizontally an average of 20
miles per hour. He said that the difference was due to different traffic flows.

Develop a linear programming model for this problem, and solve it by using the graphical method.
Chapter 3 - Mossaic Tiles, Ltd.

Gilbert Moss and Angela Pasaic spent several summers during their college years working at
archaeological sites in the Southwest. While at those digs, they learned how to make ceramic tiles from
local artisans. After college they made use of their college experiences to start a tile manufacturing firm
called Mossaic Tiles, Ltd. They opened their plant in New Mexico, where they would have convenient
access to a special clay they intend to use to make a clay derivative for their tiles. Their manufacturing
operation consists of a few relatively simple but precarious steps, including molding the tiles, baking, and
glazing.

Gilbert and Angela plan to produce two basic types of tile for use in home bathrooms, kitchens,
sunrooms, and laundry rooms. The two types of tile are a larger, single-colored tile and a smaller,
patterned tile. In the manufacturing process, the color or pattern is added before a tile is glazed. Either a
single color is sprayed over the top of a baked set of tiles or a stenciled pattern is sprayed on the top of a
baked set of tiles.

The tiles are produced in batches of 100. The first step is to pour the clay derivative into specially
constructed molds. It takes 18 minutes to mold a batch of 100 larger tiles and 15 minutes to prepare a
mold for a batch of 100 smaller tiles. The company has 60 hours available each week for molding. After
the tiles are molded, they are baked in a kiln: 0.27 hour for a batch of 100 larger tiles and 0.58 hour for a
batch of 100 smaller tiles. The company has 105 hours available each week for baking. After baking, the
tiles are either colored or patterned and glazed. This process takes 0.16 hour for a batch of 100 larger
tiles and 0.20 hour for a batch of 100 smaller tiles. Forty hours are available each week for the glazing
process. Each batch of 100 large tiles requires 32.8 pounds of the clay derivative to produce, whereas
each batch of smaller tiles requires 20 pounds. The company has 6,000 pounds of the clay derivative
available each week.

Mossaic Tiles earns a profit of $190 for each batch of 100 of the larger tiles and $240 for each batch of
100 smaller patterned tiles. Angela and Gilbert want to know how many batches of each type of tile to
produce each week to maximize profit. In addition, they have some questions about resource usage they
would like answered.
A. Formulate a linear programming model for Mossaic Tiles, Ltd., and determine the mix of tiles it
should manufacture each week.

B. Transform the model into standard form.

C. Solve the linear programming model graphically.
D. Determine the resources left over and not used at the optimal solution point.

E. Determine the sensitivity ranges for the objective function coefficients and constraint quantity
values by using the graphical solution of the model.

F. For artistic reasons, Gilbert and Angela prefer to produce the smaller, patterned tiles. They also
believe that in the long run, the smaller tiles will be a more successful product. What must the
profit be for the smaller tiles for the company to produce only the smaller tiles?

181 batches
G. Solve the linear programming model by using the computer and verify the sensitivity ranges
computed in (E).

H. Mossaic believes it may be able to reduce the time required for molding to 16 minutes for a
batch of larger tiles and 12 minutes for a batch of smaller tiles. How will this affect the solution?

Excel solver:

Larger tiles: 57; Smaller tiles: 155. Optimal solution stays the same

I. The company that provides Mossaic with clay has indicated that it can deliver an additional 100
pounds each week. Should Mossaic agree to this offer?

- No because the total pounds of clay wouldn’t affect the optimal solution
J. Mossaic is considering adding capacity to one of its kilns to provide 20 additional glazing hours
per week, at a cost of $90,000. Should it make the investment?

K. The kiln for glazing had to be shut down for 3 hours, reducing the available kiln hours from 40 to
37. What effect will this have on the solution?

- It doesn’t affect the optimal solution

Chapter 4 - Spring Garden Tools

The Spring family has owned and operated a garden tool and implements manufacturing company since
1952. The company sells garden tools to distributors and also directly to hardware stores and home
improvement discount chains. The Spring Company’s four most popular small garden tools are a trowel,
a hoe, a rake, and a shovel. Each of these tools is made from durable steel and has a wooden handle. The
Spring family prides itself on its high-quality tools.

The manufacturing process encompasses two stages. The first stage includes two operations—stamping
out the metal tool heads and drilling screw holes in them. The completed tool heads then flow to the
second stage, which includes an assembly operation where the handles are attached to the tool heads, a
finishing step, and packaging. The processing times per tool for each operation are provided in the
following table:

Tool (hr./unit) Total Hours Available

per Month
Operation Trowe Hoe Rak Shove
l e l

Stamping 0.04 0.17 0.06 0.12 500

Drilling 0.05 0.14 — 0.14 400

Assembly 0.06 0.13 0.05 0.10 600

Finishing 0.05 0.21 0.02 0.10 550

Packaging 0.03 0.15 0.04 0.15 500

The steel the company uses is ordered from an iron and steel works in Japan. The company has 10,000
square feet of sheet steel available each month. The metal required for each tool and the monthly
contracted production volume per tool are provided in the following table:

Sheet Metal (ft.2) Monthly Contracted Sales

Trowel 1.2 1,800

Hoe 1.6 1,400

Rake 2.1 1,600

Shovel 2.4 1,800

The primary reasons the company has survived and prospered are its ability always to meet customer
demand on time and its high quality. As a result, the Spring Company will produce on an overtime basis
to meet its sales requirements, and it also has a long-standing arrangement with a local tool and die
company to manufacture its tool heads. The Spring Company feels comfortable subcontracting the first-
stage operations because it is easier to detect defects prior to assembly and finishing. For the same
reason, the company will not subcontract for the entire tool because defects would be particularly hard
to detect after the tool was finished and packaged. However, the company does have 100 hours of
overtime available each month for each operation in both stages. The regular production and overtime
costs per tool for both stages are provided in the following table:

Stage 1 Stage 2

Regular Overtime Regular Overtime

Cost Cost Cost Cost

Trowel $6.00 $6.20 $3.00 $3.10

Hoe 10.00 10.70 5.00 5.40

Rake 8.00 8.50 4.00 4.30

Shovel 10.00 10.70 5.00 5.40

The cost of subcontracting in stage 1 adds 20% to the regular production cost.

The Spring Company wants to establish a production schedule for regular and overtime production in
each stage and for the number of tool heads subcontracted, at the minimum cost. Formulate a linear
programming model for this problem, and solve the model using the computer. Which resources appear
to be most critical in the production process?
We can tell that the price of tool S is 17.4 and it tells us that tool H is the most critical resource to
increase production and profit.