3.12.Maureen Laird is the chief financial officer for the Alva Electric Co.

, a major public utility

in the Midwest. The company has scheduled the construction of new hydroelectric plants 5, 10,
and 20 years from now to meet the needs of the growing population in the region served by the
company. To cover the construction costs, Maureen needs to invest some of the company’s
money now to meet these future cash flow needs. Maureen may purchase only three kinds of
financial assets, each of which costs $1 million per unit. Fractional units may be purchased. The
assets produce income 5, 10, and 20 years from now, and that income is needed to cover
minimum cash flow requirements in those years, as shown in the following table.

Maureen wishes to determine the mix of investments in these assets that will cover the cash flow
requirements while minimizing the total amount invested.

1. Summarize the model in algebraic form.

3.22.*A cargo plane has three compartments for storing cargo: front, center, and back. These
compartments have capacity limits on both weight and space, as summarized below.

Compartment Weight Capacity (Tons) Space Capacity (Cubic Feet)

Front 12 7,000

Center 18 9,000

Back 10 5,000

Furthermore, the weight of the cargo in the respective compartments must be the same
proportion of that compartment’s weight capacity to maintain the balance of the airplane.

The following four cargoes have been offered for shipment on an upcoming flight as space is
available.
Any portion of these cargoes can be accepted. The objective is to determine how much (if any)
of each cargo should be accepted and how to distribute each among the compartments to
maximize the total profit for the flight.

1. Express the model in algebraic form.

3.25.Slim-Down Manufacturing makes a line of nutritionally complete, weight-reduction

beverages. One of its products is a strawberry shake that is designed to be a complete meal. The
strawberry shake consists of several ingredients. Some information about each of these
ingredients is given next.

The nutritional requirements are as follows. The beverage must total between 380 and 420
calories (inclusive). No more than 20 percent of the total calories should come from fat. There
must be at least 50 milligrams (mg) of vitamin content. For taste reasons, there must be at least
two tablespoons (tbsp.) of strawberry flavoring for each tbsp. of artificial sweetener. Finally, to
maintain proper thickness, there must be exactly 15 mg of thickeners in the beverage.

Management would like to select the quantity of each ingredient for the beverage that would
minimize cost while meeting the above requirements.

1. Summarize this formulation in algebraic form.

3.12

Let x1 = units of Asset 1 purchased

x2 = units of Asset 2 purchased
x3 = units of Asset 3 purchased
Minimize Cost = x1 + x2 + x3 ($millions)
subject to 8x1 + 4x2 + 2x3 ≥ 1600 ($millions)
2x1 + 2x2 + 4x3 ≥ 400 ($millions)
6x2 + 8x3 ≥ 1200 ($millions)
and x1 ≥ 0, x2 ≥ 0, x3 ≥ 0.

8*X1 + 4*X2 + 2*X3 >= 1600

10*X1 + 6*X2 + 6*X3 >= 2000
10*X1 + 16*X2 + 14*X3 >= 3200

3.22
Let xij = tons of cargo i stowed in compartment j (i = 1,2,3,4; j = F, C, B)
Maximize Profit = $320(x1F + x1C + x1B) + $400(x2F + x2C + x2B)
+ $360(x3F + x3C + x3B) + $290(x4F + x4C + x4B)
subject to x1F + x2F + x3F + x4F ≤ 12 tons
x1C + x2C + x3C + x4C ≤ 18 tons
x1B + x2B + x3B + x4B ≤ 10 tons
x1F + x1C + x1B ≤ 20 tons
x2F + x2C + x2B ≤ 16 tons
x3F + x3C + x3B ≤ 25 tons
x4F + x4C + x4B ≤ 13 tons
500x1F + 700x2F + 600x3F + 400x4F ≤ 7,000 cubic feet
500x1C + 700x2C + 600x3C + 400x4C ≤ 9,000 cubic feet
500x1B + 700x2B + 600x3B + 400x4B ≤ 5,000 cubic feet
(x1F + x2F + x3F + x4F) / 12 = (x1C + x2C + x3C + x4C) / 18
(x1F + x2F + x3F + x4F) / 12 = (x1B + x2B + x3B + x4B) / 10
and x1F ≥ 0, x1C ≥ 0, x1B ≥ 0, x2F≥ 0, x2C ≥ 0, x2B ≥ 0,
x3F ≥ 0, x3C ≥ 0, x3B ≥ 0, x4F ≥ 0, x4C ≥ 0, x4B ≥ 0.
3.25
Resource Constraints:
Calories must be no more than 420.
No more than 20% of total calories from fat.

Benefit Constraints:
Calories must be at least 380
There must be at least 50 mg of vitamin content.
There must be at least 2 times as much strawberry flavoring as sweetener.

Fixed-Requirement Constraints:
There must be 15 mg of thickeners.
Let S = Tablespoons of strawberry flavoring,
CR = Tablespoons of cream,
V = Tablespoons of vitamin supplement,
A = Tablespoons of artificial sweetener,
T = Tablespoons of thickening agent,
Minimize C = $0.10S + $0.08CR + $0.25V + $0.15A + $0.06T
subject to 50S + 100CR + 120A + 80T ≥ 380 calories
50S + 100CR + 120A + 80T ≤ 420 calories
S + 75CR + 30T ≤ 0.2(50S + 100C + 120A + 80T)
20S + 50V + 2T ≥ 50 mg Vitamins
S ≥ 2A
3S + 8CR + V + 2A + 25T = 15 mg Thickeners
and S ≥ 0, CR ≥ 0, V ≥ 0, A ≥ 0, T ≥ 0.