Assignment -1

1. Consider a firm that is planning an advertising campaign

for a new product. Goals set for the campaign include
exposure to at least 100,000 individuals, no fewer than 80,000
of whom have an annual income of at least $50,000 and
no fewer than 40,000 of whom are single. For simplicity,
assume that the firm has onlyradioandtelevisionmedia available
forthis campaign. One television advertisement costs $10,000
and is expected to reachan average audience of 20,000 persons.
Ten thousand of these individuals will havean income of
$50,000 or more, and 4,000 will be single.A radio
advertisement costs $6,000 and reaches a total audience of
10,000, all ofwhom have at least $50,000 in income. Eight
thousands of those exposed to a radioadvertisement are single.
It’s summarized as below:Radio ($)Television ($)Cost per
ad6,00010,000Total audience per ad10,00020,000audience per ad
with income ≥ 50,00010,00010,000Unmarried audience per
ad8,0004,000a)Using simplex method, solve for firms cost
minimization level of number ofadvertisement via both radio
and television.b)What is the optimal level of advertisement
costc).Solve using dual problemC max =100,000VA + 80,000V1
+ 40,000VSPost Graduate ProgramPage 1
d)A, Using simplex method, solve for firms cost
minimization level ofnumber of of advertisement via both rad
2.a) optimal number of super-gro fertilizer (x1) and crop quick
fertilizer (x2)and a farmers total cost
The farmer's objective is to minimize the total cost of fertilizing.
The total cost is the sum of the individual costs of each type of
fertilizer purchased. The objective function that represents
total cost is expressed as:
minimize Z = $6 x1 + $3 x2
where,
$6 x 1 = cost of bags of Super-gro
$3 x 2 = cost of bags of Crop-quick
Constraints:
The requirements for nitrogen and phosphate represent the
constraints . Each bag of fertilizer contributes a number of
pounds of nitrogen and phosphate to the field. The constraint
for nitrogen is,
2 x 1 + 4 x 2 16 lb.
4x1+3x2 24 lb.
x1,x2 0
therefore:

const1 when x1=0 , x2=4 and x1=8 , x2=0

const2 when x1=0 , x2=8 and x1=6 , x2=0
The complete model formulation for this minimization problem
is:Graphical Solution of a Minimization Model
The first step is to graph the equations of the two model
constraints then, the feasible solution area is chosen , to reflect
the inequalities in the constraints,

graph 1. The optimal solution point

the boundary contains the point(s) closest to the origin (zero

being the lowest cost possible).

As the objective function edges toward the origin, the last point
it touches in the feasible solution area is A . In other words,
point A is the closest the objective function can get to the origin
without encompassing infeasible points. Thus, it corresponds to
the lowest cost that can be attained.
The final step in the graphical solution approach is to solve for
the values of x 1 and x 2 at point A . because point A is on the
x2 axis, x 1 = 0; thus,
Given that the optimal solution is x 1 = 0, x 2 = 8, the minimum
cost Z , is

This means the farmer should not purchase any Super-gro but,
instead, should purchase eight bags of Crop-quick, at a total
cost of $24.
Surplus Variables
Greater than or equal to constraints cannot be converted to
equations by adding slack variables, as with constraints.
Recall our fertilizer model, formulated as

where
x 1 = bags of Super-gro fertilizer
x 2 = bags of Crop-quick fertilizer
Z = farmer's total cost ($) of purchasing fertilizer
Because this problem has constraints as opposed to the   
constraints, the constraints are converted to equations a little
differently.
A surplus variable is subtracted from a constraint to convert it
to an equation (=) .
Instead of adding a slack variable with a constraint, we
subtract a surplus variable . Whereas a slack variable is added
and reflects unused resources, a surplus variable is subtracted
and reflects the excess above a minimum resource requirement
level. Like a slack variable, a surplus variable is represented
symbolically by s 1 and must be nonnegative.

For the nitrogen constraint, the subtraction of a surplus

variable gives
A surplus variable represents an excess above a constraint
requirement level .
2 x1 + 4 x2 -s 1 = 16
4 x1 + 3 x2 -s 2 = 24
X1,x2,s1,s2 0
The surplus variable s 1 transforms the nitrogen constraint into
an equation.
As an example, consider the hypothetical solution
x1=0
x 2 = 10
Substituting these values into the previous equation yields

In this equation s 1 can be interpreted as the extra amount of

nitrogen above the minimum requirement of 16 pounds that
would be obtained by purchasing 10 bags of Crop-quick
fertilizer.
In a similar manner, the constraint for phosphate is converted
to an equation by subtracting a surplus variable, s 2 :
4 x 1 + 3 x 2 -s 2 = 24lb

Graph 2  of the fertilizer example

As is the case with slack variables, surplus variables contribute
nothing to the overall cost of a model. For example, putting
additional nitrogen or phosphate on the field will not affect the
farmer's cost; the only thing affecting cost is the number of
bags of fertilizer purchased. As such, the standard form of this
linear programming model is summarized as

graph 2. shows the graphical solutions for our example, with

surplus variables included at each solution point.