Cases

1. A manufacturing firm is engaged in producing 2 products A & B. Each unit of

product A requires 5 kgs of raw material & 4 labour hours for processing, whereas
each unit of product B requires 3 kgs of raw material & 6 labour hours of the same
type. Every week the firm has an availability of 80 kg of raw material and 100
labour hours. One unit of A sold yields Rs 45/-and one unit of B sold gives Rs 30/-
as profit. Formulate this problem as a linear programming problem to determine as
to how many units of each of the products should be produced each week so that
the firm can maximize its profits. There is no marketing constraint & it is presumed
that whatever is manufactured is sold.

2. A firm uses three machines in the manufacture of three products. Each unit of
product A requires 4 hours on machine I, 3 hours on machine II and two hours on
machine III. Each unit of product B requires 5 hours on machine I, two hours on
machine II, and 4 hours on machine III. Each unit of product C requires 3 hours on
each of the three machines. The contribution margin of the three products is Rs 40,
Rs 60 and Rs 38 per unit respectively. The machine hours available on three
machines are 90, 54 and 124 hours respectively.

 What are the shadow prices of the machine hours?

 If for some reason the company has to manufacture 5 units of product A, what
would be the effect on the profit contribution & on the solution mix?
 Would there be a change in the solution if there is a 20% increase in hours
available on machine II?

3. A firm produces three products P, Q & R, each of which need to be processed in

three departments Milling, Grinding and Packaging. Each unit of product P requires
4, 5 and 3 hours in each of the three departments. Likewise, product Q requires 8, 5
and 5 hours, whereas product R requires 2, 5 and 6 hours respectively in the three
departments. Everyday 96, 108 and 150 hours are available in the three
departments. The unit contribution of the products is Rs 6, 12 & 8 for product P, Q
& R respectively. Formulate the given problem as an LPP and find the solution.