Linear programming Problem

1. Consider two models of color TV sets; Model A and B, are produced by a company to maximize
profit. The profit realized is $300 from A and $250 from set B. The limitations are
A. availability of only 40hrs of labor each day in the production department.
B. a daily availability of only 45 hrs on machine time
C. ability to sale 12 set of model A.
How many sets of each model will be produced each day so that the total profit will be as large
as possible?

Resources used per unit

Constraints Model A Model B Maximum Available hrs.

(X1) (X2)
Labor hr. 2 1 40
Machine hr. 1 3 45
Marketing hr. 1 0 12
Profit $300 $250

2. A manufacturer of light weight mountain tents makes two types of tents, REGULAR tent and
SUPER tent. Each REGULAR tent requires 1 labor-hour from the cutting department and 3labor-
hours from the assembly department. Each SUPER tent requires 2 labor-hours from the cutting
department and 4 labor-hours from the assembly department .The maximum labor hours
available per week in the cutting department and the assembly department are 32 and 84
respectively. Moreover, the distributor, because of demand, will not take more than 12 SUPER tents
per week. The manufacturer sales each REGULAR tents for $160 and costs$110 per tent to make.
Whereas SUPER tent ales for $210 per tent and costs $130 per tent to make.

Required:
A. Formulate the mathematical model of the problem
B. Using the graphic method, determine how many of each tent the company should manufacture
each tent the company should manufacture each week so as to maximize its profit?
C. What is this maximum profit assuming that all the tents manufactured in each week are sold
in that week?

3. Ashok Chemicals Company manufactures two chemicals. A and B which are sold to the
manufacturers of soaps and detergents. On the bases of the next moths demand, the
management has decided that the total production for chemicals A and B should be at least
350 kilogram. Moreover, a major customers order for 125kilograms of product A must also
be supplied. Product A requires two hours of processing time per kilogram and product B

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 requires one hours of processing time per kilogram. For the coming month 600 hours of
processing time are available. The company wants to meet the above requirements at a
minimum total production costs. The production costs are birr 2 per kilogram for product
A and birr 3 per kilogram for product B. Ashok chemicals company wants to determine its
optimal product mix and the total minimum cost relevant there to.

a. Formulate the above as a linear programing model

b. Solve the problem with the simplex method
c. Does the problem have multiple optimal solutions? Why?
4. A firm uses three machines in the manufacture of three products. Each unit of product A
requires 3 hours on machine I, two hours on machine II, and one hour on machine III.
While each unit of product B requires four hours on machine I, one hour on machine II,
and three hours on machine III. While each unit of product C requires two hours on each
of the three machines. The contribution margin of the three products is birr 30, birr 40 and
birr 35 per unit respectively. The machine hours available on the three machines are 90,
54, and 93 respectively.
a. Formulate the above problem as a linear programing model
b. Obtain optimal solution to the problem by using the simplex method. Which of the three
products shall not by produced by the firm? Why?
c. Calculate the unused capacity if any
d. What are the shadow prices of the machine hours?

5. Cookwell, a manufacturer of large size pressure cookers, produces and sells three models
of cookers. While market demands pose no restriction, the capacity to produce is currently
constrained by the limited supplies of special grade aluminum limited to 1500kg per week
and machine processing time limited to 1200 hours per week. In order to determine the
optimal product mix to maximize weekly contribution, a linear programming model as
under was formulated.

Maximize Z= 60X1+ 40X2+ 80X3

Subject to
6X1+ 3X2+ 5X3 ≤1500 (aluminum)
3X1+ 4X2+ 5X3 ≤1200 (machine hours)

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 X1, X2, X3≥0
Using the simplex method, the following tableau was obtained
Basic V Cj 60 40 80 0 0 quantity

X1 X2 X3 S1 S2

X1 1 -1/3 0 1/3 -1/3 100

X3 0 1 1 -1/5 2/5 180

Zi _ _ _ _ _ _

Cj-Zi _ _ _ _ _ _

a. Fill in all the numerical values in the above table.

b. Is the current solution is optimal? If not, carry out the iterations until an optimal solution
is reached.
c. Analyze the sensitivity of the optimal solution to the following changes.
I) Due to a machine breakdown, the machine hours available gets reduced to 1050
hours.
II) An additional quantity of 150 kg of aluminum can be obtained
III) The second model does not feature in the current optimal solution. What should be
the minimum amount increase in unit contribution on this model for this to feature
in the optimal solution?
6. A furniture manufacturer produces two types of desks: standard and executive these desks
are sold to an office furniture wholesaler, and for all practical purposes, there is an
unlimited market for any basic operations: cutting of the lumber, joining of the pieces, pre-
finishing, and final finish. Each unit of the standard desk produced takes 48 minutes of
cutting time, 2 hours of joining, 40 minutes of pre-finishing, and 5 hours and 20 minutes
of final finish time. Each units of the executive desk requires 72 minutes of cutting time, 3
hours of joining, 2 minutes of pre-finishing, and 4 hours of final finish time. The daily
capacity for each operation amounts to 16 hours cutting time, 30 hours of joining, 16 hours
of pre-finishing, and 64 hours of final finish time. The profit per unit produced is birr 40
for the standard desk and birr 50 for the executive desk.

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 a. Formulate the above problem as a linear programing model

b. Obtain optimal solution to the problem and determine the product mix that maximizes
total revenue, the total profit. (use graphical method)

c. Determine the unused capacity if any

7. A manager of a firm that assembles various electronic items wants to establish an optimal
production plan for making Tape decks. The manager has obtained the pertinent information which
is shown in the table below:

Item Assembly time Inspection Packaging cost per unit Price per unit
time time
Type A 3 5 2 65 90
Type B 4 4 4 70 110
Type C 2 4 5 50 85
Available 60 hours 72 hours 96 hours
time

a) Formulate the above LPP if the manager wants to maximize the total contribution of the output to
profit. [2 marks]
b) Write the problem in standard form and develop the initial tableau. [2 marks]
c) Determine the optimal solution using simplex. Identify the variables that are in solution at the
optimum and their values. [2 marks]
d) Identify the shadow prices and interpret each shadow price. [2 marks]

8. A transistor radio Co., manufactures models A, B, and C which have profit contribution of Birr 16,
Birr 30 and Birr 50 respectively. The weekly minimum production requirements are 20 for model
A, 120 for model B, and 60 for model C. Each type of radio requires a certain amount of time for
the manufacturing of component parts, assembly and packaging. Specifically a dozen unit of
model A requires 3 hrs for manufacturing of component parts, 4b hrs for assembly and 1 hr for
packaging. The corresponding figure for a dozen unit of model B is 3.5, 5 and 1.5 and for a dozen
unit of C are 5, 8, and 3 hrs. During the forth coming week, the company has availability of 120
hrs of manufacturing, 160 hrs of assembly, and 45 hrs of packaging time.

Required:
a) Formulate the scheduling problem as LPM.
b) Solve the problem using simplex method
c) Identify basic and non basic variables at each iteration

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 Transportation problem
1. Suppose that a firm has three factories / sources of supply /& four warehouses/point of
demand/. The firm's production capacity at the three factories, the demand for the four
destination centers located at various regions & the cost of shipping each unit from the factories
to the warehouses through each route is given as follows:
Destinations
Factory
W1 W2 W3 W4 Capacity
F1 3 2 7 6 5000
F2 7 5 2 3 6000
F3 2 5 4 5 2500
Demand 6000 4000 2000 1500 13500

Required:
a. Develop an initial feasible solution using NWCM & Compute the total cost.
b. Develop an initial feasible solution using least-cost method & compute the total cost.
2. Determine an initial feasible solution to the following transportation problem using
a. NWCM
b. LCM, &
c. VAM
Destination
D1 D2 D3 D4 Supply
A 11 13 17 14 250
Source B 16 18 14 10 300
C 21 24 13 10 400
Demand 200 225 275 250

3. Develop an initial feasible solution using LCM

R S T Supply
A 1 2 3 100
B 4 1 5 110
Demand 80 120 60

4. Three garment plants are available for monthly education of four styles of men's shirts. The
capacities of the three plants are 45,000, 93,000 and 60,000 shirts. The number of shirts required

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in style "a" through "d" are 28,000, 65,000, 35,000 & 70,000, respectively. The profits, in $ per
shirt, at each plant for each style are shown below.
Table: The garment plants' profit.
STYLE
a b c d
PLANT
1 8 12 -2 6
2 13 4 3 10
3 0 7 11 8
How many shirts of each type to produce in each plant so that profit is maximized?
5. A dairy firm has three plants located in different regions. The daily milk production at each
plant is as follows:
Plant 1: 6 million liters.
Plant 2: 1 million liters, &
Plant 3: 10 million liters
Each day the firm must fulfill the needs of its four distribution centers. Minimum requirement
at each center is as follows.
Distribution center 1: 7 million liters
" " 2: 5 " "
" " 3: 3 " "
" " 4: 2 " "
Cost of shipping one million liters form each plant to each distribution center is given in the
following table in hundreds of dollar.
Distribution Center
D1 D2 D3 D4
P1 2 3 11 7
Plant
P2 1 0 6 1
P3 5 8 15 9

Find the initial basic feasible solution by:

a. North-west corners method
b. LCM
c. VAM if the object is to minimize the total transportation cost
6. XYZ Tobacco Company purchases tobacco and stores in warehouses located in four cities A, B,
C, and D with a capacity of 90, 50, 80, and 60 respectively. The warehouses supply tobacco to
cigarette companies in three cities L, P, and Q that have a demand of 120, 100, and 110

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respectively. The following railroad shipping costs per tone (in hundred dollars) have been
determined.

Warehouse L p Q
location
A 7 10 5
B 12 9 4
C 7 3 11
D 9 5 7

Because of rail road construction, shipments are temporarily prohibited from warehouse at city A to
L Cigarette Company.
A. Find the optimum distribution for XYZ Tobacco Company. (use VAM)
B. Are there multiple optimum solutions? If there are alternative optimum solutions, identify
them.
7. A manufacturer has distribution centers X, Y, and Z. these centers have 40, 20, and 40 units of
his product. His retail outlets at A, B, C, D, and E require 25,10,20,30, and 15units respectively.
The transport cost between each centers and each outlet is given in the following table.
Distribution Retail outlet
centre A B C D E
X 55 30 40 50 40
Y 35 30 100 45 60
Z 40 60 95 35 30

Find the optimum cost using both stepping stone and MODI method.(use NWC method to find the
initial solution.

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 Assignment problem
1. A department has five employees with five jobs to be performed .The time (in hours) each
man will take to perform each job is given in the effectiveness matrix.
Employees

A 10I 5 II 13III IV
15 V
16
B 3 9 18 13 6
C 10 7 2 2 2
Jobs

D 7 11 9 7 12

E 7 9 10 4 12

How should the jobs be allocated, one per employees, so as to minimize the total man-hours?
2. A company has four territories open, and four salesmen available for an assignment. The
territories are not equally rich in their sales potential. Based on the past performance, the
following table shows the annual sales (in $) that can be generated by each salesman in
each territory. Find the optimal assignment and the maximum expected total sales.
Territory
I II III IV
A 42 35 28 21
Salesmen

B 30 25 20 15
C 30 25 20 15
D 24 20 16 12

3. Five salesmen are to be assigned to five territories. Based on the past performance, the
following table shows the annual sales man in each territory. Find the optional assignment.
T1 T2 T3 T4 T5
S1 26 14 10 12 9
S2 31 27 30 14 16
S3 15 18 16 25 30
S4 17 12 21 30 25
S5 20 19 25 16 10
4. MEGA printing press, a publisher headquartered in Addis Ababa, wants to assign three
recently hired college graduates, Marta, Bakcha and Hirut to regional sales districts in
Mekelle, Bahir Dare, and DireDawa. But the firm also has an opening in Gambela and
would send one of the three there if it were more economical than a move to Mekelle,

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 Bahir Dar and Dire Dawa. It will cost Br. 1,000 to relocate Marta to Gambela, Br. 800 to
relocate Baklcha there, and Br. 1,500 to move Hirut. What is the optimal assignment of
personnel to offices?

Office Mekelle Bahir Dare Dire Dawa

Hire
Marta Br.800 Br 1,100 Br 1,200
Bekcha Br. 500 Br 1,600 Br 1,300
Hirut Br. 500 Br 1,000 Br 2,300

5. In the modification of a plant layout of a factory four new machines M1, M2, M3 and M4
are to be installed in a machine shop. There are five vacant places A, B, C, D and E
available. Because of limited space, machine M2 can not be placed at C and M3 cannot be
placed at A. the cost of placing of machine at place i (in $) is shown below.
Location

A B C D E
M1 9 11 15 10 11
Machine M2 12 9 - 10 9
M3 - 11 14 11 7
M4 14 8 12 7 8

Find the optimal assignment schedule.

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 Decision theory
1. Consider the following payoff table for three alternatives, A,B, and C, under two future states
of the economy, good and bad.
Economic Conditions
Investment Good Bad
A $ 70,000 $ 25,000
B 120,000 -60,000
C 40, 000 40,000
Determine the decision using the following decision criteria.
a) Maximax
b) Maximin
c) Minimax regret
d) Hurwicz (α = 0.3)
e) Equal likelihood
2. An investor is considering investing in stock, real estate, or bonds under uncertain economic
conditions. The payoff table of returns for the investor’s decision situation is shown below
Economic Conditions
Investment Good Stable Poor
Stocks $ 5,000 $ 7,000 $ 3,000
Real estate -2,000 10,000 6,000
Bonds 4,000 4,000 4,000
Determine the best investment using the following decision criteria.
a) Equal likelihood
b) Maximin
c) Maximax
d) Hurwicz ( α = 0.3)
e) Minimax regret
3. A leading company in the textile industry has acquired another competing company and is
contemplating the future of one of its major plants in the city of Hawassa. The company is
considering three alternative decisions:

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 I. Expand the plant and produce lightweight, durable materials for possible sales to the
military, a market with little foreign competition;
II. Maintain the status quo at the plant, continuing production of textile goods that are subject
to heavy foreign competition; or
III. Sell the plant now. If one of the first two alternatives is chosen, the will still be sold at the
end of the year. The amount of profit that could be earned by selling the plant in a year
depends on foreign market conditions. The following payoff table describes this decision
situation.

Decision State of nature

Good foreign competitive condition Bad foreign competitive
condition
Expand Br. 700,000 Br. 400,000
Maintain status quo Br. 1,200,000 Br. −200,000
Sell now Br. 350,000 Br. 350,000
Required:
A. Determine the best decision using the following decision criteria.
a. Maximax d. Hurwicz (𝛼 = 0.4)
b. Maximin e. Laplace
c. Minimax regret
B. Assume now that the company did some research and estimated the probability of 0.60 that
Good foreign competitive condition will exist and a probability of 0.4 that Bad foreign
competitive condition will exist. Determine the best decision using the expected monetary
value and expected opportunity loss criteria.
C. If the company is not confident about the probability estimates above and is ready to acquire
an ideal level of information, what is the maximum amount it should be ready to pay for it?
D. Develop a decision tree with expected values for the alternatives at the probability nodes.
4. ABC Manufacturing Company must decide whether it should purchase component part from
a supplier or manufacture the component at its plant. If demand is high, it would be to the
company’s advantage to manufacture the component. However, if demand is low, ABC’s unit

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 manufacturing cost will be high due to underutilization of equipment. The projected profit in
thousands of dollars for ABC’s make or buy decision is shown below.
Decision alternatives Low Medium High
Manufacture component −20 40 100
Purchase component 10 45 70
The states of nature have the following probabilities:
P(low demand) = 0.35, P(medium demand) = 0.35, and P(high demand) = 0.30
A. a. Use a decision tree and EMV criterion to recommend a decision.
b. Use EOL criterion to determine the best alternative.
c. What is ABC’S optimal decision strategy with perfect information; calculate the
EPC and EVPI.
B. If the probabilities for the states of nature were not given, what would have been your
decision using each of these decision criteria. a. Maximax b. Maximin c. Minimax
regret d. Hurwicz (𝛼 = 1) 𝑒. Laplace
5. A bookstore sells a particular book of tax laws for Birr 100. It purchases the book for Birr 80/-
per copy. Since, some of the tax laws changes every year. , the copies unsold at the end of a
year become outdated and can be disposed off for Birr 30 each. According to past experience,
the annual demand for this book is between 18 and 23 copies.
Assuming that the order for this book can be placed only once during the year, the problem
before the store’s manager is to decide how many copies of the book should be purchased for the
next year.For this problem, since the annual demand varies between 18 and 23 copies there are six
possible events.
E1 : 18 copies are demanded, E4 : 21 copies are demanded
E2 : 19 copies are demanded E5 : 22 copies are demanded
E3 : 20copies are demanded E6 : 23 copies are demanded
Also, there are six possible strategies, or courses of action. They are:
A1 : buy 18 copies A4 : buy 21 copies
A2 : buy 19 copies A5 : buy 22 copies
A3 : buy 20 copies A6 : buy 23 copies
Let's assume:
 The managers have agreed to assess their level of optimism at 60%.

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  The book store observes from the past sales data that the proportion of times the number
of copies sold is 18, 19, 20, 21, 22, and 23 are respectively, 0.05, 0.10, 0.30, 0.40, 0.10,
and 0.05. Thus, in this problem there are 6 possible alternatives to choose from, and an
equal, number of states of nature, or events.
Required:
1. List the possible acts and events
2. Construct the pay- off table.
3. Choose among the various alternatives on the base of the following criterion:
a. Maximax decision rule d. Laplace Criterion
b. Maximin decision e. Hurwicz Criterion
c. Savage Minimax Regret Criterion
4. Calculate
a. Expected Monetary Value (EMV)
b. Expected Opportunity Loss
c. Expected Value of Perfect Information

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 Network models
1. An established company has decided to add a new product to its line. It will buy the product
form manufacturing concern, package is & sell it to a number of distributes selected on a
geographical basis. Market research has identified the volume expected & the size of sales
force required. The steps

Activity Description Time (Week)

A Organize sales office 6
B Hire Salesman 4
C Train salesman 7
D Select advertising agency 2
E Plan advertising campaign 4
F Conduct 10
G Design package 2
H Setup packaging facilities 10
I Package initial Stocks 6
J Order Stock from manufacture 13
K Select distributors 9
L Sell to distributors 3
M Ship stocks 5

Required:
a) Draw a network diagram.
b) Indicate the critical path the critical activities & the total project time
c) For each non-critical activity, find the slack
2. A research & development department is developing a new power supply for a console
television set. It has broken the job down into the following form:

Job Immediate Expected tome

predecessors (days)
A - 5
B A 7
C B 2
D B 3
E C 1
F D 2

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 G C 1
H E,F 3
I G,H 10

a. Draw a network diagram

b. Identify the critical path and What is its length
c. Find the slack for each task
3. A small project is composed of 7 activities whose time estimates are listed in the table below.
Activities are identified by their beginning (i)& ending (j) node numbers.

Activity Estimated Duration (in weeks)

(i,j) Optimistic Most likely Pessimistic
1-2 1 1 7
1-3 1 4 7
1-4 2 2 8
2-5 1 1 1
3-5 2 5 14
4-6 2 5 8
5-6 3 6 15

a) Draw the project network

b) Find the expected duration& variance for each activity. What is the expected project
length?
c) Calculate the variance & standard deviation of the project length.
4. A publisher has a contract with an author to publish a textbook. The (simplifies activities
associated with the production of the textbook are given below. The author is required to
submit to the publisher a hard copy and a computer file of the manuscript.
Activity Predecessors Duration (weeks)
A: manuscript proofreading by editor - 3
B: sample pages preparation - 2
C: Book cover design - 4
D: Artwork preparation - 3
E: Author’s approval of edited manuscript and sample pages A,B 2
F: Book formatting E 4

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G: Author’s review of formatted pages F 2
H: Author’s review of artwork D 1
I: Production of printing plates G,H 2
J: Book production and binding C,I 4

Required:
A. Develop the associated network for the project.
B. Find the critical path.
C.
a. Calculate earliest start time and finish time
b. Calculate latest start time and finish time
D. Identify the slack time in the

Using the PERT three-estimate approach, the usual three estimates of the duration of each activity
have been obtained as given below.
A. Find the estimate of the mean and variance of the duration of each activity.
B. Find the mean critical path.
A. Find the approximate probability that the project will finish within 12 weeks.
5. For the same activities and activity interdependence in problem 3,above,the appraised value of
activity time estimate are developed in three estimates as follows:

Activities Immediate Expected time (days)

Predecessors Optimistic Most probable Pessimistic
1. 2 3 5 7
2. - 2 3 4
3. 1 1 2 3
4. 3 1 3 9
5. 1 4 4 4
6. 4 4 8 12
7. 8 1 5 17
8. 1 1 2 3
9. 6,7,10 2 2 2
10. 8,5 2 3 4

A. Compute the expected activity time and standard deviation for each activity time, assuming
a normal probability distribution for each activity time.
B. Identify the critical path and expected time for completion of the project,

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 C. What is the probability that all the activities on the current critical path will be completed
within 12 days?
6. A project consisting of twelve distinct activities is to be analyzed by using PERT. The
following information is given (time estimates are in days) [7.5 marks]
Activity Immediate Normal time
Predecessors (days)
A - 2
B - 3
C A 7
D A 5
E B 6
F B 9
G C,D 6
H E 6
I C,D 5
J G,H 3
K F 8
L J,K 5

A. Develop the associated network for the project.

B. Find the critical path
C. Calculate earliest start time and finish time
D. Calculate latest start time and finish time.
E. Identify the slack time in the project
7. The following table shows list of project activities, immediate predecessors, and expected
time (days) for each activity.

Activities Immediate Predecessors Expected time (days)

1. 2 5
2. - 3
3. 1 2
4. 3 3
5. 1 4
6. 4 8
7. 8 5
8. 1 2
9. 6,7,10 2
10. 8,5 3

A. For each activity, define Earliest start time, Earliest finish time, Latest start time, Latest
finish time, and Slack
B. Identify the critical path

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8. For the same activities and activity interdependence in problem 3,above,the appraised value
of activity time estimate are developed in three estimates as follows:

Activities Immediate Expected time (days)

Predecessors Optimistic Most probable Pessimistic
11. 2 3 5 7
12. - 2 3 4
13. 1 1 2 3
14. 3 1 3 9
15. 1 4 4 4
16. 4 4 8 12
17. 8 1 5 17
18. 1 1 2 3
19. 6,7,10 2 2 2
20. 8,5 2 3 4

D. Compute the expected activity time and standard deviation for each activity time,
assuming a unimodal beat probability distribution for each activity time.
E. Identify the critical path and expected time for completion of the project,
F. What is the probability that all the activities on the current critical path will be completed
within 12 days?
9. Given the information below

Activities Immediate Normal Crash time Normal Crash cost ($)

predecessors time (day) cost ($)
1 2 5 3 50 72
2 - 3 2 20 30
3 1 2 1 15 30
4 3 3 1 8 20
5 1 4 4 30 30
6 4 8 4 13 21
7 8 5 1 45 65
8 1 2 1 45 52
9 6,7,10 2 2 40 40
10 8,5 3 2 22 34

Required:
A. Draw the network diagram; specify the normal, time, normal cost, crash cost, maximum
crash days, and cost per crash day for each activity. Assume linear relationships.
B. Compute the expected cost of the project (normal time).
C. Suppose that the company has to reduce the completion time by 7 days, how much would
it cost to reduce the completion time.

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 Individual Assignment

No. Problems Question number

1. Linear programming problem 1 2
2. Transportation Model 1 7
3. Assignment Model 2 3
4. Decision Theory 2 3
5. Network Model 4 5

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