OPTIMIZATION MODELS FOR BUSINESS

Assignment 1
By: Section 3 Group 11

DM23451 Raghav Bansal

DM23343 Subhro Sankho Das

DM23347 Tushar Mehta Assignment 1

DM23350 Jenish Bhikhubhai Sarvaiya
DM23429 Priyanka Gupta By: Section 3 Group 11
DM23407 Aniruddh Panikker
DM23451 Raghav Bansal
DM23343 Subhro Sankho Das
DM23347 Tushar Mehta
DM23350 Jenish Bhikhubhai Sarvaiya
DM23429 Priyanka Gupta
DM23407 Aniruddh Panikker
FOR BUSINESS DECISION MAKING

gnment 1
tion 3 Group 11

Raghav Bansal
Subhro Sankho Das
Tushar Mehta
Jenish Bhikhubhai Sarvaiya
Priyanka Gupta
Aniruddh Panikker
(A)

Step 1 What are the decisions to be made?

product mix decision A B

7 3

Step 2 What are the constraints?

A B
1 1 <= 10
3 1 24
1 2 16

Required <= Available

10 10
24 24
13 16
A,B >= 0

Step 3 Objective function

maximize 3 2

3A+2B 27 the corner point is at (7,3)

(B) in the objective function, the coefficient changes from 3 to 5

Does the optimal solution change?

Step 1 What are the decisions to be made?

product mix decision A B

7 3

Step 2 What are the constraints?

 A B
1 1 <= 10
3 1 24
1 2 16

Required <= Available

10 10
24 24
13 16
A,B >= 0

Step 3 Objective function

maximize 5 2

5A+2B 41 the corner point remains the same at (7,3)

(c ) The coefficient of B changes from 2 to 4, does the optimal solution change?

Step 1 What are the decisions to be made?

product mix decision A B

4 6

Step 2 What are the constraints?

A B
1 1 <= 10
3 1 24
1 2 16

Required <= Available

10 10
18 24
16 16
A,B >= 0

Step 3 Objective function

maximize 3 4

3A+4B 36 the corner point is changed at (4,6)

(A)

Step 1 What are the decisions to be made?

AM cases of model A manufactur
AM BM AP BP BM cases of model B manufactur
Product Mix 100 60 0 90 AP cases of model A purchased
BP cases of model B purchased

Step 2 What are the constraints?

AM BM AP BP

Demand for Model A 1 1 = 100

Demand for Model B 1 1= 150
Injection Time Constraint 4 3 <= 600
Assembly Time Constraint 6 8 <= 1080
AM BM AP BP >= 0

Available Required
Demand for Model A 100 = 100
Demand for Model B 150 = 150
Injection Time Constraint 580 <= 600
Assembly Time Constraint 1080 <= 1080

Step 3 Minimise the cost

Z 10 6 14 9
total cost 2170

Therefore, the management should produce 100 units of Model A and 60 units of
Model B and purchase 90 units of Model B.
The total cost incurred will be $2170.

(B) Which constraints are binding?

we conclude that the constraints Demand for A, Demand for B, and Asembly Time Constraint are binding.
Answer Report 1'!A1
2170+12.25=
(C ) What are dual values, interpret each?

Final Shadow
Name Value Price
Demand for Model A 100 12.25
Demand for Model B 150 9
 Injection Time Constraint 580 0
Assembly Time Constraint 1080 -0.375

Each dual value or shadow price indicates the change in the final optimal value of the objective function
when the respective constraint is increased or decreased by 1 unit. For example, if the demand for A becomes
101, the final value of the objective function will become 2170+12.25= 2182.25. Similarly, if the demand for B incre
the final value becomes 2170+9=2179 and if assembly time increases by 1 minute, the optimal solution decreases t

(D) If you could change the right hand side of the constraint by one unitwhich one would you choose and why?

If we can change the right hand side of one constraint by 1 unit then we will choose to
decrease the right hand side of demand for A as it will decrease the overall cost by $12.25 and
the objective function is to minimize the cost.
cases of model A manufactured
cases of model B manufactured
cases of model A purchased
cases of model B purchased

nstraint are binding.

 objective function
e demand for A becomes
arly, if the demand for B increases,
e optimal solution decreases to 2170-0.375=2169.625.

d you choose and why?

Microsoft Excel 16.0 Answer Report
Worksheet: [Assignment Solution 1.xlsx]Problem 2
Report Created: 05-03-2022 13:07:11
Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
Solver Engine
Engine: Simplex LP
Solution Time: 0.031 Seconds.
Iterations: 3 Subproblems: 0
Solver Options
Max Time Unlimited, Iterations Unlimited, Precision 0.000001, Use Automatic Scaling
Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative

Objective Cell (Min)

Cell Name Original Value Final Value
$C$31 optimal solution Minimise the cost 2170 2170

Variable Cells
Cell Name Original Value Final Value Integer
$C$7 Product Mix AM 100 100 Contin
$D$7 Product Mix BM 60 60 Contin
$E$7 Product Mix AP 0 0 Contin
$F$7 Product Mix BP 90 90 Contin

Constraints
Cell Name Cell Value Formula Status Slack
$C$22 Demand for Model A 100 $C$22=$E$22 Binding 0
$C$23 Demand for Model B 150 $C$23=$E$23 Binding 0
$C$24 Injection Time Constraint 580 $C$24<=$E$24 Not Binding 20
$C$25 Assembly Time Constraint 1080 $C$25<=$E$25 Binding 0
Microsoft Excel 16.0 Sensitivity Report
Worksheet: [Book1]Problem 2
Report Created: 04-03-2022 00:39:53

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$C$7 Product Mix AM 100 0 10 1.75 1E+030
$D$7 Product Mix BM 60 0 6 3 2.333333333
$E$7 Product Mix AP 0 1.75 14 1E+030 1.75
$F$7 Product Mix BP 90 0 9 2.333333333 3

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$C$22 Demand for Model A 100 12.25 100 11.42857143 100
$C$23 Demand for Model B 150 9 150 1E+030 90
$C$24 Injection Time Constraint 580 0 600 1E+030 20
$C$25 Assembly Time Constrain 1080 -0.375 1080 53.33333333 480
Range of Optimality
-1E+030 11.75
3.666667 9
12.25 1E+030
6 11.33333
(A) Range of optimality for the objective function co-efficients

Name Range of Optimality Objective Coefficient

Lower limit Upper limit
Product Mix AM -1E+030 11.75 10
Product Mix BM 3.666666667 9 6
Product Mix AP 12.25 1E+030 14
Product Mix BP 6 11.33333 9
If the value of the objective coefficient remains within the range of optimality,
thent the objective coefficient does not change.

(B) Manufacturing cost increase to 11.2 for model A

What is the new optimal solution?

Step 1 What are the decisions to be made? AM cases of model A manufac

BM cases of model B manufac
AM BM AP BP AP cases of model A purchase
Product Mix 100 60 0 90 BP cases of model B purchase

Step 2 What are the constraints?

AM BM AP BP

1 1 = 100
1 1= 150
4 3 <= 600
6 8 <= 1080
AM BM AP BP >= 0

Available Required
100 = 100
3.666667 = 150
11 <= 600
29.33333 <= 1080

Step 3 Minimise the cost

Objective function 11.2 6 14 9

total cost 2290
 Thus, we can conclude the the optimal solution will remain the same, i.e. Manufacture 100 units of A, 60 units of B

(C ) Manufacturing cost increase to 11.2 for model A

Manufacturing cost decreases to 5 for model B
How would the optimal sultion change?

Step 1 What are the decisions to be made?

AM BM AP BP
Product Mix 0 135 100 15

Step 2 What are the constraints?

AM BM AP BP

1 0 1 0= 100
0 1 0 1= 150
4 3 0 0 <= 600
6 8 0 0 <= 1080
AM BM AP BP >= 0

Available Required
100 = 100
150 = 150
405 <= 600
1080 <= 1080

Step 3 Minimise the cost

AM BM AP BP
Objective function 11.2 5 14 9
total cost 2210

Therefore, the management should produce 0 units of Model A and 135 units of
Model B at their Newark Plant and purchase 100 units of Model A and 15 units of Model B.
The total cost incurred will be $2210.
 For problem 2

e range of optimality,

cases of model A manufactured

cases of model B manufactured
cases of model A purchased
cases of model B purchased
100 units of A, 60 units of B and purchase 90 units of B.

135 units of
and 15 units of Model B.
 (A)
Step 1 What are the decisions to be made?

Suits Sport coats D1 D2

product mix 100 100 0 0

Step 2 What are the constraints?

suit sport coats D1 D2

cutting time 1.2 0.8 0 0
sewing time 0.7 0.6 0 0
material 6 4 0 0
overtime 0 0 1 1
suits 1 0 0 0
sports coat 0 1 0 0

used available
cutting time 200 <= 200
sewing time 130 <= 180
material 1000 <= 1200
overtime 0 <= 100
suits 100 >= 100
sports coat 100 >= 75

Step 3 Total profit

Suits Sport coats D1 D2
190 150 -15 -10

z 34000

Therefore the optimal solution is to produce 100 suits and 100 sport coats.
NO overtime is required for either of the operations
The total profit after deducting overtime is $34,000

(B)
Step 1 What are the decisions to be made?

Suits Sport coats D1 D2

product mix 100 100 0 0
 Step 2 What are the constraints?

suit sport coats D1 D2

cutting time 1.2 0.8 0 0
sewing time 0.7 0.6 0 0
material 6 4 0 0
overtime 0 0 1 1
suits 1 0 0 0
sports coat 0 1 0 0

used available
cutting time 200 <= 200
sewing time 130 <= 180
material 1000 <= 1200
overtime 0 <= 100
suits 100 >= 100
sports coat 100 >= 75

Step 3 Total profit

Suits Sport coats D1 D2
190 150 -15 -10

z 34000 = 34000

Therefore the optimal solution is to produce 100 suits and 100 sport coats.
NO overtime is required for either of the operations
The total profit after deducting overtime is $36,000
There is no change in the optimal solution.

(c ) Step 1 What are the decisions to be made?

Suits Sport coats D1 D2 D3

product mix 100 100 0 0 0

Step 2 What are the constraints?

suit sport coats D1 D2 D3(extra length material)

cutting time 1.2 0.8 0 0 0
sewing time 0.7 0.6 0 0 0
material 6 4 0 0 0
overtime 0 0 1 1 0
suits 1 0 0 0 0
sports coat 0 1 0 0 0
Extra length 0 0 0 0 1

used available
cutting time 200 <= 200
sewing time 130 <= 180
material 1000 <= 1200
overtime 0 <= 100
suits 100 >= 100
sports coat 100 >= 75
Extra length 0 <= 0

Step 3 Total profit

Suits Sport coats D1 D2 D3
190 150 -15 -10 -8

z 34000