FINAL EXAM 2015 SOLUTIONS

PROBLEM 1
Ginny Rait is the general manager for N.R.G., Inc., a company producing two types of electric
generators - the BR54 and the BR49. Orders have been received, and a production schedule is to
be set up for the next three months. Generators may be produced in one month and stored
until the next month. However, the cost of holding these in inventory is 1% of the cost per
month. The BR54 costs $80 each and the BR49 costs $95 each. The company can produce a
maximum of 1,100 units each month. Currently there are 50 units of each type in the
warehouse, and at the end of October, the company would like to have 100 units of the BR54
and 150 units of the BR49 in stock. The demand for each product in each month is given below:

Formulate this as a linear programming problem to minimize cost.

Variables:

BR54 i= productionof BR54 ∈monthi , for i=1,2,3

BR 49i= production of BR 49∈monthi , for i=1,2,3
I 54 i=inventory of BR 54∈month i , for i=0 , 2,3,4
I 4 9i =inventory of BR 4 9∈month i , for i=0 , 2,3,4
D 54i=demand of BR 54∈month i , for i=1,2,3
D 4 9i=demand of BR 4 9∈month i , for i=1,2,3

Decision Variables:

BR54 i= productionof BR 54 ∈monthi , for i=1,2,3

BR 49i= production of BR 49∈monthi , for i=1,2,3
I 54 i=inventory of BR 54∈month i , for i=0 , 2,3,4
I 49i=inventory of BR 49∈monthi , for i=0 ,2,3,4

Objective Function (minimize costs):

Min Z=80 BR54 i +95 BR 49i+ 0.8 I 54i +0.95 I 4 9i

Subject to:

1) Production Constraint:
BR54 i +BR 49 i<1100
2) Demand BR54 i in month i:
BR54 i + I 54(i−1)−I 54 i=D 54i
3) Demand BR 4 9i in month i:
BR 4 9i + I 4 9(i−1)−I 4 9i =D 4 9i
4) Initial Inventory:
 I 4 90 =50∧I 5 40 =5 0
5) Final Inventory:
I 4 9 4=150∧I 5 4 4=100
6) Non-Negativity and Integer Variables:
all variables integer ∧≥0

PROBLEM 2
Harris Segal, marketing director for North-Central Power and Light, is about to begin an
advertising campaign promoting energy conservation. In trying to budget between
television and newspaper advertisements, he sets the following goals in order of
importance (rank):
1. The total advertising budget of $120,000 should not be exceeded.
2. There should be a mix of TV and newspaper ads, with at least 10 TV spots (costing $5,000
each) and at least 20 newspaper ads (costing $2,000 each).
3. The total number of people to read or hear the advertisements should be at least 9
million.
Each television spot reaches approximately 300,000 people. A newspaper advertisement is read
by about 150,000 persons. Formulate Segal's goal programming problem that could be used to
find out how many of each type of ad to place. How would you proceed to solve the problem?

Variables:
X =number of television advertisments
Y =number of newspaper advertisments
Deviation Variables:
+ ¿=amount bywhichthe total budget goal is under /¿achieved ¿

d −¿
B
/d B ¿
+ ¿=amount bywhichthe min. number of TV adv . goalis under /¿achieved ¿

d −¿
T
/d T ¿
+ ¿=amount bywhichthe min.number of newspaper adv .goal is under /¿achieved¿

d −¿
N
/d N ¿

+ ¿=amount bywhichthe audience goal isunder /¿ achieved ¿

−¿ /d ¿
dA A

Objective function (minimize underachievement):

Min Z=R1 ¿
Subject to:

1) Budget Goal:
+ ¿=120.000¿

5 . 000 X +2 .000 Y + d−¿−d

B
B ¿

2) Number of TV adv. Goal:

+¿=10¿

X + d−¿−d
T
T ¿

3) Number of Newspaper adv. Goal:

+ ¿=20 ¿

Y +d −¿−d
N
N ¿

4) Audience Goal:
+ ¿=9.000 .000¿

300.000 X +150.000 Y +d−¿−d

A
A ¿

5) Non-negativity and integer:

X , Y integers∧X , Y ≥ 0
Solution:

By solving the solution, we observe that for X=10 and Y= 35, both first and second rank
objectives are achieved. In fact, total costs are 120.000 and there are 10 tv advs and 35
newspaper advs. However, rank 3 goal is underachieved by 750.000.

PROBLEM 3
Zuckerman Wiring and Electric is a company that installs wiring and electrical fixtures in
residential construction. John Zuckerman has been concerned with the amount of time that it
takes to complete wiring jobs. Some of his workers are very unreliable. A list of activities and
their optimistic, their pessimistic and their most likely completion times in days are given in the
following table:

Determine the expected completion time and variance for each activity.
John Zuckerman would like to determine the total project completion time and the critical path
for installing electrical wiring and equipment in residential houses. In addition, determine ES, EF,
LS, LF, and slack for each activity.
Total time: 36 days
Critical path: C-D-E-F-H-K

PROBLEM 4
HC Express transport Inc. has n warehouses located in Spain that supply m clients. The
manager has decided to reorganize the distribution of the products from the warehouses to
its clients. A truck will be sent to each client from the corresponding warehouse(s). Each
warehouse has a capacity cj, and each week clients demand ai units of the products. The
manager has computed the transportation costs between each client i and warehouse j (tij).
Formulate a linear program to decide the transportation. Define decision variables,
constraints, and objective.

Index:
i=client ∈region i, for i=1 ,… , m
j=warehouse∈region j , for j=1 , … ,n
Variables:
a i=demand of client i
c j=capacity of warehouse j
t i j=transportation costs ¿ warehouse j¿ client i

Decision Variable:
X ij =quantity transported ¿ j¿ i

Objective Function (minimize transportation costs):

m n
Min Z=∑ ∑ X ij ∙ t ij
i=1 j=1
Subject to:

1) Capacity:
m

∑ X ij ≤ c j ∀ j=1 , … , n
i=1
2) Satisfy Demand:
n

∑ X ij=ai ∀ i=1 ,… , m
j=1
3) Non-negativity:
X ij ≥0
After solving the problem, the manager observes that some clients are supplied from more than
one warehouse. For practical reasons (the definition of sales regions), the manager wants to
supply each client from only one warehouse. Reformulate the problem. Redefine decision
variables, constraints and objective.

Index:
i=client ∈region i, for i=1 ,… , m
j=warehouse∈region j , for j=1 , … ,n
Variables:
a i=demand of client i
c j=capacity of warehouse j
t ij =transportation costs ¿ warehouse j ¿ client i

Decision Variable:

X ij =binary variable ;1 if warehouse j supplies client i , 0 otherwise

Objective Function (minimize transportation costs):

m n
Min Z=∑ ∑ X ij ∙ t ij ∙a i
i=1 j=1
Subject to:

1) Capacity:
m

∑ X ij ∙ ai ≤ c j ∀ j=1 ,… , n
i=1

2) Clients served only by 1 supplier:

∑ X ij=1
j=1
3) Binary Variable: X i j=binary

Bonus question (1 extra point max.)

With the new solution found, some clients are still very far from the assigned warehouse, so the
manager decides to add a new objective: minimize the number of clients that will be assigned
further tan S km from the warehouses. Reformulate the problem by adding this new objective.

Index:
i=client ∈region i, for i=1 ,… , m
j=warehouse∈region j , for j=1 , … ,n
Variables:
a i=demand of client i
c j=capacity of warehouse j
d ij =distance ¿ warehouse j ¿ client i

Decision Variable:
 X ij =binary variable ;1 if warehouse j supplies client i , 0 otherwise
N i= { j∈ J :d ij ≥ S }

Objective Function (minimize number of clients supplied by warehouses further away than
S):
m n
Min Z=∑ ∑ X ij
i=1 j ∈N i
Subject to:

1) Capacity:
m

∑ X ij ∙ ai ≤ c j ∀ j=1 ,… , n
i=1

2) Clients served only by 1 supplier:

∑ X ij=1
j=1
3) Binary Variable: X ij =binary