Unity University Adama Special Campus

Department of Business Management

Master of Business Administration

Group Assignment for the course Quantitative Techniques for Decision Making

Name ID
1. AAAAA
2. BBBBB
3. CCCCC
4. DDDDD

Instructor

February 2022
Adama Ethiopia
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 1. 3F Furniture manufacturer produces two products: Beds and Chairs. Each unit of Bed requires 3
hrs in molding unit, 4hrs in painting unit, and 1 hr in finishing. On the other hand, each unit of
Chair requires 3 hrs in molding unit, 2 hrs in the paint shop and 2 hours in finishing. Each week,
there are 210 hrs available in molding, 200hrs in painting, and 120 hrs in finishing unit. The
demand for Beds cannot exceed 40 units per week. Each unit of Bed contributes Birr20 to profit,
while each unit of chair contributes Birr 30. Determine the number of units of each product per
week to maximize the profit? (Use Graphic Method to solve the given LP problem).
Sol
Solution
tion
Resource Beds Chair Maximum Available
Molding Unit 3 3 210
Painting Unit 4 2 200
Finishing Unit 1 2 120
Maximum Demand 40 Unlimited
Profit for each products 20 30
LP Model
Let X1 and X2 be the number of Beds and Chairs Respectively Let the weekly profit be Z. Then We must
Max Z=20X1+30X2
Subject to 3X1+3X2≤210Molding Constraint
4X1+2X2≤200painting Constraint
X1+2X2≤120 Finishing Constraint X1≤40
Demand Constraint
Plot the constraints
3x1+3x2≤210 molding constraint
3x1+3x2=210
If x1=0
⇒3x1+3x2=210
⇒3(0)+3x2=210
⇒x2=7
The coordinates (0,70)
If x2=0
⇒3x1+3(0)=210
⇒x1=70

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The coordinates (70,0)
X1≤40
⇒painting constraint 4x1+2x2≤200 4x1+ 2x2 ≤ 200 3x1+3x2≤210
4x1+2x2=200
If x1=0
⇒x2=100, the coordinates (0,100) and if x2=0 ⇒x1=50, the coordinates (50, 0)
⇒finishing constraint
X4+2x2≤120
X1+2x2=120 if x1=0⇒x2=60, the coordinates (60, 0)
And if x2=0⇒x1=120, the coordinates (120, 0)

(0.100) x2

(0.70)

D(0.60)

C(80/3,140/3)
B(40,20)
FEASIBL x1+2x2≤120
REGION

(40,0) A (50,0) (70,0) (120,0) x1

At the corner point C, where constraint painting and finishing are intersected. Hence optimal
solution x1=80/3, x2=140/3
2) A firm produces three products A, B, and C. Each of these products passes through three departments:
Fabrication, Finishing, and Packaging. Each unit of product A requires 3, 4, and 2 hours respectively in the
three departments. Each unit of product B requires 5, 4, and 4 hours respectively in the three departments.
Each unit of product C requires 2, 4, and 5 hours respectively in the three departments. Every week, 60 hours
are available in the Fabrication department, 72 hours in the Finishing department, and 100 hours in the
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Packaging department. The firm sells each unit of products A, B, and C for $10, $20, and $16 respectively.
The cost of production per unit for products A, B, and C are $5, $10, and $8 respectively.
Required:
i) Formulate the problem as a LPM
ii) Using simplex method determine the number of units of each of the three products that the firm should
produce each week so as to maximize the total profit.
iii) How much is this maximum profit?

iv) Determine if any capacity would remain unutilized

Solution
Step 1: Formulate this as LPP.  Let X1, X2 and X3 be the number of units produced of the products A, B
and C respectively.

Objective function:        Max Z = 5X1 + 10X2 + 3X3

 Subject to constraints:    3X1 + 5X2 + 2X3 ≤ 60

                                 4X1 + 4X2 + 4X3 ≤ 72

 2X1 + 4X2 + 5X3 ≤ 100         X1, X2, X3 ≥ 0

Step 2: Now converting into standard form of LPP

                  Max Z= 5X1 + 10X2 + 3X3 + 0S1 + 0S2 + 0S3

                  3X1 + 5X2 + 2X3 + S1 = 60

                  4X1 + 4X2 + 4X3 + S2 = 72

                  2X1 + 4X2 + 5X3 + S3 = 100                   X1, X2, X3, S1, S2, S3 ≥ 0

                  where S1 ,S2 and S3 are slack variables.

Step 3: Find the initial feasible solution .An initial basic feasible solution is obtained by setting   X1 =0,
X2 = 0 and X3 = 0. Thus, we get S1 = 60, S2 = 72 and S3 =100.

Step 4: Construct the starting (initial) simplex tableau.

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       Cj  → 5 10 8 0 0 0  
  B.V. CB XB X1 X2 X3 S1 S2 S3 Minimum
Ratio
R1 S1 0 60 3 (5) 2 1 0 0 60/5=12

R2 S2 0 72 4 4 4 0 1 0 72/4=18
R3 S3 0 100 2 4 5 0 0 1 100/4=25
      Zj 0 0 0 0 0 0  
      −5 −10 −8 0 0 0  
Step 5: The most negative value of ∆j is −10 hence X2 is the incoming variable (↑) and the least positive
minimum ratio is 12 hence S1 is the outgoing variable (⟶). The element under column X2 and row R1   is

the key element i.e. 5 so divide each element of row R1 by 5 (i.e.  ). Subtract appropriate
multiples of this new row from the remaining rows, so as to obtain zeros in the remaining positions.
Performing the row operations 
we get the second Simplex tableau as   

         
      Cj → 5 10 8 0 0 0  
  B.V. CB XB X1 X2 X3 S1 S2 S3 M.R.
X2 10 12 3/5 1 2/5 1/5 0 0 12/2/5=30
S2 0 24 8/5 0 12/5 −4/5 1 0 24/12/5=10
S3 0 52 -2/5 0 17/5 −4/5 0 1 52/17/5=15.294
      Zj 6 10 4 2 0 0  
      1 0 −4 2 0 0  
 Step 6:  The most negative value of ∆j is -4 hence X3 is the incoming variable (↑) and the least positive
minimum ratio is 10 hence S2 is the outgoing variable (�). The element under column X2 and row
R1   is the key element i.e. 5 so divide each element of row R 2b by 12/5 (i.e. Rc → Rb * 5/12). Subtract
appropriate multiples of this new row from the remaining rows, so as to obtain zeros in the remaining

positions. Performing the row operations  .

We get the third Simplex tableau as

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     Cj  → 5 10 8 0 0 0
B.V. CB XB X1 X2 X3 S1 S2 S3
X2 10 8 1/3 1 0 1/3 −1/6 0
X3 8 10 2/3 0 1 −1/3 5/12 0
S3 0 18 −8/3 0 0 1/3 −17/12 1
    Zj 26/3 10 8 2/3 5/3 0
    j
11/3 0 0 2/3 5/3 0

It is apparent from this table that all ∆ j =Zj − Cj are positive and therefore an optimum solutions
is reached. So X1 = 0, X2 = 8, X3 = 10

 Z = 5X1 + 10X2 + 8X3 = 160

And also as S3 is coming out to be 18 so there are 18 hours unutilized in finishing department.
In case the objective function of the given LP problem is to be minimized, then we convert it into a
problem of maximization by using
Min. Z* = − Max. (−Z). The procedure of finding optimal solution using Simplex Method is illustrated
through the following example:

3) Min Z = 12X1+20X2
Subject to:
6X1 + 8X2 ≥100
7X1 + 12X2 ≥120
X1, X2 ≥ 0.
A) Solve the LLP using graphical approach.
B) How many units of each product has to be produced?

C) What is the minimum cost?

Solution
Standard form:
Min Z = 12x1+20x2 +0s1+0s2+MA1+MA2
Subject to:
6x1 + 8x2 -s1+A1=100,
7x1 + 12x2 –s2+A2=120,
X1, X2, S1, A1, A2 >= 0

Cj 12 20 0 0 M

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CB BV x1 x2 s1 s2 A1 A2 b r
M A1 6 8 -1 0 1 0 100 25/2
M A2 7 (12) 0 -1 0 1 120 10
Zj=Σ CBaij 13M 20M -M -M M M 220M ↑I.S
Δj = Zj- Cj 13M-12 20M-20 -M -M 0 0
↑K

Cj 12 20 0 0 M M
CB BV x1 x2 s1 s2 A1 A2 b r
M A1 4/3 0 -1 2/3 1 0 20 15
20 x2 7/12 1 0 -1/12 0 1 10 120/7
Zj=Σ -35/3+4/3M 20 -M - M M 200+20M
CBaij 5/3+2/3M
Δj = Zj- 4/3M-1/3 0 -M 2/3M-5/3 0 0 Δj = Zj-
Cj Cj
↑K
Cj 12 20 0 0
CB BV x1 x2 s1 s2 b CB
12 x1 1 0 -3/4 1/2 15 12
20 x2 0 1 7/16 -3/4 5/4 20
Zj=Σ 12 20 -1/4 -9 205 Zj=Σ
CBaij CBaij
Δj = Zj- 0 0 -1/4 -9 Δj = Zj- 0
Cj Cj

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This
part is
feasible
solutio
n
(white
portion
      )
     
     
     
     
     
                   
2.3 4.6 6.9 9.2 11.5 13.8 16.1 18.4 20.7 23

Min Z = 205, x1 = 15, x2 = 5/4

4) A company has two plants, each of which produces and supplies two products: A and B. The plants can
each work up to 16 hrs a day. In plant 1, it takes 3 hrs to prepare and pack 1000 gallons of A and 1 hr to
prepare and pack 1 quintal of B. In plant 2, it takes 2 hrs to prepare and pack 1000 gallons of A and 1.5 hrs to
prepare and pack a quintal of B. In plant 1, 28,000 to prepare and pack a quintal of B, whereas these costs are
Birr 18,000 and Birr 26,000 respectively in it costs Birr 15,000 to prepare and pack 1000 gallons of A and
Birr plant 2. The company is obliged to produce daily at least 10,000 gallons of A and 8 quintals of B.
i) Formulate the problem as LPM to find out as to how the company should organize its production so that the
required amounts of the two products be obtained at minimum cost.

ii) Solve the problem using simplex method.

iii) What is the minimum cost?

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Solution
The data of the problem is summarized as follows

Product Total Avil.

Resources/Constraints
A B Hrs
Plant 1: 3hrs/thousand gallons 1 hr./quintal 16
Preparation Time(hrs.)
Plant2: 2hrs./thousand gallons 1.5 hr./quintal 16
Minimum Daily
Production 10 thousand gallons 8 quintals  
Plant 1: 15,000 gallons 28,000/quintal  
Cost of Production(Birr)
Plant 2: 18,000 gallons 26,000/quintal  
Decision Variables: Let
X1, X2 quantity of product A ( in ‘000 gallons) to be produced in plants 1 and 2 respectively
The LP Model
Min Z = 15000X1 + 18,000X2 + 28000X3 + 26,000X4
Subject to the constraint
Preparation time constraints
3X1 + X3 <= 16
2X2 + 1.5X4 <= 16
Minimum daily production requirements constraint
LPP with Application
X1 + X2 >= 10
X3 + X4 >= 8
And X1 +X2 + X3 + X4 >= 0.

Tableau 1
x y z w S1 S2 S3 p  
1 1 1 1 1 0 0 0 40
2 1 -1 -1 0 -1 0 0 10
0 -1 0 1 0 0 -1 0 10
-0.5 -3 -1 -4 0 0 0 1 0

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Tableau 2
x y z w S1 S2 S3 p  
0 0.5 1.5 1.5 1 0.5 0 0 35
1 0.5 -0.5 -0.5 0 -0.5 0 0 5
0 -1 0 1 0 0 -1 0 10
0 -2.75   -1.25 -4.25 -0.25 0 1 2.5

Tableau 3

x y z w S1 S2 S3 p  
0 2 1.5 0 1 0.5 1.5 0 20
1 0 -0.5 0 0 -0.5 -0.5 0 10
0 -1 0 1 0 0 -1 0 10
0 -7 -1.25 0 0 -0.25 -4.25. 1 45

Tableau 4
x y z w S1 S2 S3 p  
0 1 0.75 0 0.5 0.25 0.75 0 10
1 0 -0.5 0 0 -0.5 -0.5 0 10
0 0 0.75 1 0.5 0.25 -0.25 0 20
0 0 4 0 3.5 1.5 1 1 115

Optimal Solution: p = 115; x = 10, y = 10, z = 0, w = 20

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