Optimization models for Business Decision Making

Assignment – 2

1. Premier Consulting’s two consultants, Avery and Baker, can be scheduled to work for
clients up to a maximum of 160 hours each over the next four weeks. A third consultant,
Campbell, has some administrative assignments already planned and is available for
clients up to a maximum of 140 hours over the next four weeks. The company has four
clients with projects in process. The estimated hourly requirements for each of the
clients over the four-week period are as follows:

Hourly rates vary for the consultant–client combination and are based on several factors,
including project type and the consultant’s experience. The rates (dollars per hour) for each
consultant–client combination are as follows:

a. Formulate the problem as a transportation problem, with the optimal solution

providing the hours each consultant should be scheduled for each client to
maximize the consulting firm’s billings. What is the schedule and what is the total
billing?

b. New information shows that Avery doesn’t have the experience to be scheduled
for client B. If this consulting assignment is not permitted, what impact does it
have on total billings? What is the revised schedule?
2. The U.S. Cable Company uses a distribution system with five distribution centers and
eight customer zones. Each customer zone is assigned a sole source supplier; each
customer zone receives all of its cable products from the same distribution center. In an
effort to balance demand and workload at the distribution centers, the company’s vice
president of logistics specified that distribution centers may not be assigned more than
two customer zones. The following table shows the five distribution centers and cost of
supplying each customer zone (in thousands of dollars):

a. Determine the assignment of customer zones to distribution centers that will

minimize cost. Which distribution centers, if any, are not used?

3. Cleveland Area Rapid Delivery (CARD) operates a delivery service in Cleveland

metropolitan area. Most of CARD’s business involves rapid delivery of documents and
parcels between offices during the business day. CARD promotes its ability to make fast
and on-time deliveries anywhere in the metropolitan area. When a customer calls with a
delivery request, CARD quotes a guaranteed delivery time. The following network shows
the street routes available. The number above each arc indicates the travel time in
minutes between the two locations.

a. Develop a linear programming model that can be used to find the minimum time
required to make a delivery from location 1 to location 6.
b. How long does it take to make a delivery from location 1 to location 6?
c. Assume that it is now: 1.00P.M. and that CARD just received a request for a
pickup at location 1. The closest CARD courier is 8 minutes away from location 1.
If CARD provides a 20% safety margin in guaranteeing a delivery time, what is the
guaranteed delivery time if the package picked up at location 1 is to be delivered
to location 6?
4. The north-south system passing through Albany, New York, can accommodate the
capacitates shown. Can the highway system accommodate a north-south flow of 10,000
vehicles per hour? If the highway system has revised flow capacities as shown in figure
2, what is the maximal flow of vehicles per hour through the system? How many
vehicles per hour must travel over each road to obtain this maximal flow?

Fig. 3.1