Alumina Aluminum1

Alumina Aluminum processes aluminum sheets in addition to bars and plates from its plant
at Renukoot. The production process is fairly standardized, and rolls of aluminum sheets
measuring precisely 1.5 meters in width are produced. The quantity per roll is measured by
its thickness and is limited to 12 inches for efficient handling and transportation. Also, a
maximum of 35 rolls is produced per week, given the availability of raw materials and
production capacity. The manufacturer has a long list of downstream client firms that source
different widths of these rolls for a wide variety of applications ranging from automotive to
food packaging. Although most of its long-time customers procure the rolls in their standard
sizes, a sizable number of customers also demand “non-standard” sizes (i.e., rolls of widths
less than 1.5 meters). Therefore, the standard-sized rolls are subsequently passed through
slitting lines, which are appropriately adjusted to produce the required sizes.

Alumina has witnessed a sharp increase in the demand for aluminum rolls of non-standard
sizes lately because of the growth of a few packaging startups nearby. As per its marketing
team’s estimates, this increased demand level should sustain for the next few years.
Accordingly, approval for the increase in its production capacity is already under process.
However, Alumina needs to rely primarily on backordering to meet these orders until the
clearance is received and the capacity is enhanced. The pending demands include rolls of the
following non-standard widths (in centimeters) for the coming week.

Order Width Days Order Width Days Order Width Days

1 115 19 11 110 60 21 100 26
2 90 58 12 40 51 22 30 54
3 60 57 13 50 36 23 65 17
4 50 14 14 25 21 24 30 16
5 100 11 15 85 35 25 75 56
6 110 40 16 25 23 26 115 23
7 105 29 17 80 18 27 60 56
8 65 14 18 95 54 28 40 31
9 115 56 19 100 51 29 20 44
10 40 27 20 100 56 30 105 27

1
Prepared by Shuvabrata Chakraborty for classroom discussions

Page 1 of 2
Currently, given the demand from its long-time customers, Alumina can spare only 10 rolls
out of its total weekly production to meet the non-standard-sized orders. Alumina prioritizes
orders on a first come first serve basis to protect goodwill. Accordingly, the columns “Days”
in the table depict the no. of days passed since each order is placed.
1) Determine the orders that Alumina should fulfill this week.
Alumina’s management feels that the current approach of back ordering and fulfilling a part
of the pending demand each week might not be ideal. To keep abreast with the stiff market
competition, it needs an alternative approach that enables it to fulfill all of its pending
demands every now and then. The operations team suggests that increasing the availability
of certain raw materials would undoubtedly boost the weekly production capacity and leave
more rolls (up to 10 extra) to meet these non-standard orders. However, the concerned raw
materials are costly, and the management would certainly want to minimize the additional
expenditure. It, therefore, asks the operations manager to get them the minimum number of
additional rolls required to meet all orders. Also, considering the above orders as typical of
order buildup over two months, the management feels that this would give a fair idea of the
additional investment requirement every two months and hence help plan the yearly budget.
2) Determine the minimum number of additional rolls required to meet all orders this time.

Deliverables:
1) Upload a pdf version of the page where you have written/typed the mathematical models
for questions 1 and 2. Also, write the optimal solution here that you obtain from AMPL.
2) Upload the following 4 AMPL files for each model: .dat, .mod., .run, and .txt (your AMPL
code should be generic)
Note: To earn full credit, please present your solutions, and especially the mathematical
models, systematically with clear and complete descriptions of all your parameters, decision
variables, objective functions and constraints.

Page 2 of 2