IE 4160

Operations Research I
Study Session
Instructor: Dr. Ellips Masehian

IME Department, Cal Poly Pomona, Fall 2018

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 Topics to be covered
• Examples of mathematical modeling
• Demonstration of the Simplex method
• Demonstration of the Big-M method
• Demonstration of the Two-phase method

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 Mathematical Modeling – Example 1

1. Bloomington Breweries produces beer and ale.

Beer sells for $5 per barrel, and ale sells for $2
per barrel. Producing a barrel of beer requires 5
lb of corn and 2 lb of hops.
Producing a barrel of ale equires 2 lb of corn and
1 lb of hops. Sixty pounds of corn and 25 lb of
hops are available.
Formulate an LP that can be used to maximize
revenue. Solve the LP graphically.
 Mathematical Modeling – Example 1

Solution:
Let x1 = barrels of beer produced
x2 = barrels of ale produced
Then we should solve
max z = 5x1 + 2x2
s.t. 5x1 + 2x2  60
2x1 + x2  25
x1, x2  0

Graphically we find the optimal solution to be z = 60, x1 = 10,

x2 = 5, x1 = 12, x2 = 0 is an alternative optimal solution.
 Mathematical Modeling – Example 2

• For a telephone survey, a marketing research group needs

to contact at least 150 wives, 120 husbands, 100 single adult
males, and 110 single adult females. It costs $2 to make a
daytime call and (because of higher labor costs) $5 to make
an evening call. The Table below lists the results. Because of
limited staff, at most half of all phone calls can be evening
calls. Formulate an LP to minimize the cost of completing
the survey.

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 Mathematical Modeling – Example 2

• Solution:
Let D = Daytime calls and E = Evening calls.
Then the correct formulation is
min z = 2D + 5E
s.t. 0.30D + 0.30E  150 (wives constraint)
0.10D + 0.30E  120 (husbands constraint)
0.10D + 0.15E  100 (single male constraint)
0.10D + 0.20E  110 (single female constraint)
E/ (E+D) 1/2 OR E-D0
D0, E0

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 Mathematical Modeling – Example 3

2. Steelco manufactures two types of steel at three different

steel mills. During a given month, each steel mill has 200
hours of blast furnace time available. Because of
differences in the furnaces at each mill, the time and cost
to produce a ton of steel differs for each mill. The time
and cost for each mill are shown in Table. Each month,
Steelco must manufacture at least 500 tons of steel 1 and
600 tons of steel 2. Formulate an LP to minimize the cost
of manufacturing the desired steel.
 Mathematical Modeling – Example 3

• Let xij = Number of tons of Steel j produced each

month at Mill i. Then a correct formulation is
min z = 10x11 + 12x21 + 14x31 + 11x12 + 9x22 + 10x32
s.t. 20x11 + 22x12 200(60) (Mill 1 Const.)
24x21 + 18x22 200(60) (Mill2 Const.)
28x31 + 30x32 200(60) (Mill 3 Const.)
x11 + x21 + x31 500(Steel 1 Demand)
x12 + x22 + x32600 (Steel 3 Demand)
 Mathematical Modeling – Example 4

3. Sunco Oil has refineries in Los Angeles and Chicago. The Los Angeles
refinery can refine up to 2 million barrels of oil per year, and the
Chicago refinery up to 3 million. Once refined, oil is shipped to two
distribution points: Houston and New York City. Sunco estimates that
each distribution point can sell up to 5 million barrels per year.
Because of differences in shipping and refining costs, the profit
earned (in dollars) per million barrels of oil shipped depends on
where the oil was refined and on the point of distribution (see Table).
Sunco is considering expanding the capacity of each refinery. Each
million barrels of annual refining capacity that is added will cost
$120,000 for the Los Angeles refinery and $150,000 for the Chicago
refinery. Use linear programming to determine how Sunco can
maximize its profits less expansion costs over a ten-year period.
 Mathematical Modeling – Example 4

All variables are in millions of barrels of oil.

Let x11 = Oil sent each year from LA to Houston.
x12 = Oil sent each year from LA to NY.
x21 = Oil sent each year from Chicago to Houston.
x22 = Oil sent each year from Chicago to NY.
y1 = Capacity added to LA.
y2 = Capacity added to Chicago.
Then a correct formulation (objective function is in thousands of dollars) is
max z = 10{20x11+15x12+18x21+17x22} - 120y1 - 150y2
s.t. x11 + x215 (Amount shipped to Houston  Houston Demand)
x12 + x225 (Amount shipped to NY  NY Demand)
x11 + x122+y1 (Don't ship more from LA than is available)
x21 + x223+y2 (Don't ship more from Chicago than is available)
All variables 0
 Mathematical Modeling – Example 5

Rylon Corporation manufactures Brute and Chanelle perfumes. The raw

material needed to manufacture each type of perfume can be purchased
for $3 per pound. Processing 1 lb of raw material requires 1 hour of
laboratory time. Each pound of processed raw material yields 3 oz of
Regular Brute Perfume and 4 oz of Regular Chanelle Perfume. Regular
Brute can be sold for $7/oz and Regular Chanelle for $6/oz. Rylon also has
the option of further processing Regular Brute and Regular Chanelle to
produce Luxury Brute, sold at $18/oz, and Luxury Chanelle, sold at $14/oz.
Each ounce of Regular Brute processed further requires an additional 3
hours of laboratory time and $4 processing cost and yields 1 oz of Luxury
Brute. Each ounce of Regular Chanelle processed further requires an
additional 2 hours of laboratory time and $4 processing cost and yields 1
oz of Luxury Chanelle.
Each year, Rylon has 6,000 hours of laboratory time available and can
purchase up to 4,000 lb of raw material. Formulate an LP that can be used
to determine how Ry lon can maximize profits. Assume that the cost of the
laboratory hours is a fixed cost.
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• Rylon must determine how much raw material to purchase and
how much of each type of perfume should be produced.
We therefore define our decision variables to be
x1 = number of ounces of Regular Brute sold annually
x2 = number of ounces of Luxury Brute sold annually
x3 = number of ounces of Regular Chanelle sold annually
x4 = number of ounces of Luxury Chanelle sold annually
x5 = number of pounds of raw material purchased annually
Rylon wants to maximize: Contribution to profit = revenues from
perfume sales - processing costs - costs of purchasing raw material
= 7x1 + 18x2 + 6x3 + 14x4 - (4x2 + 4x4) - 3x5
= 7x1 + 14x2 + 6x3 + 10x4 - 3x5
• Thus, Rylon’s objective function may be written as
max z = 7x1 + 14x2 + 6x3 + 10x4 - 3x5

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Rylon faces the following constraints:
• Constraint 1 No more than 4,000 lb of raw material can be purchased
annually.
• Constraint 2 No more than 6,000 hours of laboratory time can be used each
year.
Constraint 1 is expressed by
x5 <= 4,000
To express Constraint 2, note that
Total lab time used annually = time used annually to process raw material +
time used annually to process Luxury Brute + time used annually to process
Luxury Chanelle
= x5 + 3x2 + 2x4
Then Constraint 2 becomes
3x2 + 2x4 + x5 <= 6,000

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• Ounces of Regular Brute Sold + ounces of Luxury Brute sold
= 3x5
x1 + x2 = 3x5
• Ounces of Regular Chanelle sold + ounces of Luxury
Chanelle sold = 4x5
x3 + x4 = 4x5

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