Session # 2

Linear programming formulation

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Course: Operations/ Optimization Models for

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Shounak Basak
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Managerial Decisions Pa
Room no. 6, Library Building,
Programme: TATA GMP XLRI – Xavier School of Management,
Term II, 2021 Jamshedpur – 831001
Jamshed1
Phone: 0657 – 665 – 3424
Email: shounak@xlri.ac.in

Shounak Basak
PODS Area, XLRI – Xavier School of Management
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Linear programming

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formulation

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Shounak Basak
12/10/2021
PODS Area, XLRI – Xavier School of Management
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LP formulation
Problem # 3.1
Mr. Harry Potter and Mr. Ron Weasley, as best friends are enterprising enough to take on leaky cauldron by
establishing their own venture hopping kettle. Mr. Weasley takes care of the operations and decided to serve 3 different
types of tea to consumers.

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Delightful Darjeeling tea

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Amazing Assam tea
Normal Nilgiri tea

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Mr. Weasley has to plan to make the tea extracts before the shop opens to its customers. The amount of tea extracts to

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be made has to be decided by Mr. Weasley but under strict instructions of Mr. Potter to maximize profits. Mr. Weasley

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figures out the following problems while deciding the amount of tea extract to be made.

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DD requires 2 labour hours for making each litre of tea while AA and NN need 1 labour hour each. All types of tea are

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made magically from same leaves but in varying quantities. DD requires 40 gm of tea leaves for each litre of tea while

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for making AA, 50 gm is required. 45 gm of tea leaves is required for each litre of Nilgiri tea. For making DD, 60 gm
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of sugar needs to be put in while it is 55 gm for AA and 70 gm for NN. The magical machine used to boil tea takes 0.5
hours for making DD, 2 hour for making AA and 1.5 hours for making NN. The machine can work for at most 5 hours.
20 hours of labour hours are available. 0.5 kg of tea leaves are available along with a kg of sugar. Mr. Weasley knows
that it is required to make at most 2 litres of DD. 1 litre of DD sells for 600 Knuts (wizarding currency), AA for 400
Knuts and NN for 350 Knuts.
Mr. Potter suggests Mr. Weasley to take help from Hermione Granger to find the optimal amount of tea to be made.
Hermione Granger uses linear programming to find the solution to the problem. Could you formulate the LPP?
Shounak Basak
12/10/2021
PODS Area, XLRI – Xavier School of Management
3
LP formulation
Problem # 3.2

Mr. Weasley comes across a revised version of the problem after gathering some more data from the shop. Mr. Weasley
comes to know that in addition to the information given in problem 1, there needs to be a minimum 3 litres of AA to be

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served in the shop. Could you reformulate the problem?

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Shounak Basak
12/10/2021
PODS Area, XLRI – Xavier School of Management
4
LP formulation
Problem # 3.3
Gringotts bank has opened a non-wizarding branch in Jamshedpur. The bank intends to invest in commercial real-estate
development projects. There are 3 real-estate projects in hand – office building, hotel, and shopping centre. The
investment needs to be carried out in 4 instalments and then, the money can be recovered thereafter. The capital

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requirements for the project are given below:

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Investment Capital

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Requirements (in Million $)

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Year Office Hotel Shopping Resourc
Net present value of the return expected on each project. What should be

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building centre e

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Availabl the optimal percentage of capital investment in each project? (note: the

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0 40 80 90 25 percentage is the percentage stake in each project i.e. if the bank thinks of
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1 60 80 50 45 Pa
investing 10%, 10% and 20% respectively, then it will invest $ 4 Mn, $ 8
2 90 80 20 65
3 10 70 60 80 Mn and $ 18 Mn respectively in each project).
Net 45 70 50
present
Value
Return

Shounak Basak
12/10/2021
PODS Area, XLRI – Xavier School of Management
5
LP formulation
Problem # 3.4
A solid waste management company intends to use 4 different types of waste materials to make 3 different grades of
products. The products Grade A is better than product Grade B which is still better than product Grade C. However, the

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technical team that has prepared the blueprint for manufacture of these products has laid down following requirements.

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Grad Specification Amalgamat Selling Material Available Treatment cost

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e ion cost price amount (kg) per kg

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A Material 1: Not more than 30% of total weight $ 3 per kg $ 8.5 per kg

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Material 2: Not less than 40% of total weight
1 3000 $3

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Material 3: Not more than 50% of total weight

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2 2000 $6

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Material 4: Exactly 20% of total weight
B Material 1: Not more than 50% of total weight $ 2.5 per kg $ 7 per kg

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3 4000 $4

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Material 2: Not less than 10% of total weight Pa
Material 4: Exactly 10% of total weight 4 1000 $5
C Material 1: Not more than 70% of total weight $ 2 per kg $ 5.5 per kg

Additionally, for each material, at least half of the amount available must be collected and treated. Also, exactly $ 30000
should be used to treat these materials.
Formulate an LPP to find how much amount of material should be treated and how much grade of product should be
made.
Shounak Basak
12/10/2021
PODS Area, XLRI – Xavier School of Management
6
LP formulation
Problem # 3.5
Madame Rosmerta has employed a leading advertising firm Thomas & Finnigan to help design a promotional campaign
that will achieve maximum possible exposure for the newer variety of butterbeer. Madame will pay the advertising firm
a fee based on services performed which will not exceed $ 1 million. Madame has also allocated $ 4 million for the

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advertising expenses. Thomas & Finnigan has identified 3 most effective advertising media for this product:

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Media 1: TV Commercials
Media 2: Magazine Ad

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Media 3: Newspaper Ad

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The associated costs are listed below:

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Costs ($)

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TV Commercial Magazine Ad Newspaper Ad

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Advertising 300000 150000 100000
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expense Also, Thomas & Finnigan could arrange only 5 TV
Services cost 90000 30000 40000 Commercial slots.
Formulate an LPP to maximize the exposure of the
Expected number 1300000 600000 500000 product.
of eyeballs

Shounak Basak
12/10/2021
PODS Area, XLRI – Xavier School of Management
7
 LP formulation
Problem # 3.6
A company named Hagrid’s manufactures different kinds of breakfast cereals that is sold in two forms: powder and
granules. The raw material used for the food are: oat, wheat and barley. The raw materials (with the exception of brown
sugar) first need to be ground and then all raw materials that will form a product are blended. In the last step of the

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production process the product mix is either transformed to granules or sieved to obtain powder.

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The availability of raw material is given as below:

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Raw Material Available Amount in kg Cost in $/kg

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Oats 11900 0.13

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Wheat 23500 0.17
Brown Sugar 750 0.12

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Every food product needs to fulfil certain nutritional

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The cost of manufacturing for different steps are given

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requirements. The percentage of proteins, lipids and fibres
below ($/kg):
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contained in the raw materials and the required percentages in
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the final products are listed below: Grinding Blending Granulating Sieving
0.25 0.05 0.42 0.17
Raw Material Proteins Lipids Fibre
Oats 13.6% 7.1% 7%
Wheat 4.1% 2.4% 3.7%
The daily demand for granules is 9 tonnes (9000 kg) and
Brown Sugar 5% 0.3% 25% powder is 12 tonnes (12000 kg). What should be the
Required content in > 9.5% > 2% < 6%
cereal
amount of oats, wheat and brown sugar that should be used
in the cereals to minimize cost?
Shounak Basak
12/10/2021
PODS Area, XLRI – Xavier School of Management
8
LP formulation
Problem # 3.7
Durmstrang Inc is an iron works located in Adityapur, near Jamshedpur. In a recent move, the company was able to
secure an order from UK based firm to supply 500 tonnes of shipbuilding steel. Due to the corrosive environment
prevailing in sea, ship grade steel must follow some strict composition guidelines. Following steel composition

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requirements were required:

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Chemical Element Minimum Grade Maximum Grade

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Carbon (C) 2% 3%
Copper (Cu) 0.4% 0.6%

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Manganese (Mn) 1.2% 1.65%

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The company has ingots of following alloys available with it.

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Raw Material C% Cu % Mn % Availability Cost in

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in Tonne $/Tonne As a production manager could you formulate an LPP to

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High Strength 2.5 0 1.3 400 200
suggest what would be the most cost effective way of
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Steel
High Carbon 3 0 0.8
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300 250 manufacturing ship-grade steel?
Steel
Non-corrosive 0 0.3 0 600 150
Iron
Copper Alloy 0 90 0 500 220
High Strength 0 96 4 200 240
Copper Alloy
High Strength 0 0.4 1.2 300 200
Aluminium Alloy
Aluminium Alloy 0 0.6 0 250 165

Shounak Basak
12/10/2021
PODS Area, XLRI – Xavier School of Management
9
References
Material for the Lecture has been sourced from: Selected References:

Russell, R. S., & Taylor-Iii, B. W. (2008). Operations management along the supply https://www.cellphones.ca/cell-phones/p/what-is-sim-card-10066/
chain. John Wiley & Sons. https://www.indiatvnews.com/news/india-indian-navy-aims-to-induct-first-indigenous-aircraft-
Stevenson, W. (2014). Operations management. McGraw-Hill Higher Education. carrier-by-2018-348222

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Chase, R. B., Jacobs, F. R., & Shankar, R. (2010). Operations and supply chain https://www.indiatvnews.com/science/news-isro-makes-history-as-its-mars-orbiter-mission-

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management. Mcgraw Hill completes-four-years-465256
Mahadevan, B. (2015). Operations management: Theory and practice. Pearson https://www.financialexpress.com/infrastructure/railways/bogibeel-bridge-longest-rail-road-indian-

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Education India railways-opening-date-facts-features/1162677/
Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2010). Operations management: https://www.financialexpress.com/infrastructure/railways/indian-railways-creates-history-converts-

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processes and supply chains. Upper Saddle River, New Jersey: Pearson diesel-loco-to-make-in-india-10000-hp-electric-locomotive/1086123/

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Simchi-Levi, D., Kaminsky, P., Simchi-Levi, E., & Shankar, R. (2008). Designing and

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managing the supply chain: concepts, strategies and case studies. Tata McGraw-Hill

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Education
Chopra, S., & Meindl, P. (2007). Supply chain management. Strategy, planning &

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operation. In Das summa summarum des management (pp. 265-275). Gabler

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Shah, J. (2009). Supply chain management: text and cases. Pearson Education India

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Shounak Basak
10-12-2021
PODS Area, XLRI – Xavier School of Management
10