Solutions to Linear

Programming
Problems
Applied Statistics and Quantitative Method
Assignment #1



GROUP 6
Abie Widyatmojo 1306355990
Billy Biondi 1306456261
Donny M Sitompul 1306356412
R Nurjaman B 1306357270
Vincentius Ricky T 1306420466


Problem #1 : Serendipity
Introduction
The three princes of Serendip went on a little trip. They could not carry too much weight. More than 300
pounds made them hesitate. They planned to the ounce. When they returned to Ceylon they discovered
that their supplies were just about gone. When, what to their joy, Prince William found a pile of
coconuts on the ground. Each will bring 60 rupees, said Prince Richard with a grin as he almost tripped
over a lion skin. Look out! cried Prince Robert with glee as he spied some more lion skins under a tree.
These are worth even more300 rupees each If we can just carry them all down to the beach. Each
skin weighed fifteen pounds and each coconut, five, but they carried them all and made it alive. The
boat back to the island was very small. 15 cubic feet baggage capacitythat was all. Each lion skin took
up one cubic foot while eight coconuts the same space took. With everything stowed they headed to sea
and on the way calculated what their new wealth might be.
Eureka! cried Prince Robert, Our worth is so great That theres no other way we could return in this
state. Any other skins or nut that we might have brought Would now have us poorer. And now I know
what Ill write my friend Horace in England, for surely only he can appreciate our serendipity.
Problem
Formulate and solve Serendipity by graphical LP in order to calculate what their new wealth might be.
Solution
Let:
X1 : Number of Lion Skin carried
X2 : Number of Coconut carried
Since each lion skin weighed 15 pounds and each coconut 5 pounds, while they did not want to bring
more than 300 pounds :
15 X1 + 5 X2 300 (1)
Also, since each lion skin took up one cubic foot while eight coconuts the same space took and the boat
back to the island was very small in which only 15 cubic feet baggage capacity, then we have:

X1 + 1/8 X2 15 (2)
Every coconut will bring 60 rupees while lion skin worth 300 rupees. Then the objective function will be:
MAXIMIZE 300 X1 + 60 X2 .. (3)
Furthermore, we have the following model:
Objective : Z: f(X1,X2) = MAX {300 X1 + 60 X2 }
Constraints: 15 X1 + 5 X2 300
X1 + 1/8 X2 15
X1 , X2 0
By entering the model given above to the POM software table :
Serendipity Solution
Lion Skin Coconut RHS Dual
Maximize 300 60
Constraint 1 15 5 <= 300 7.2
Constraint 2 1 .125 <= 15 192
Solution-> 12 24 5040
Table 1 Constraints and Maximizing Function Entry Table

The graphical LP provided by POM software is as per Figure 1.

Figure 1 Graphical Solution
Conclusion
By searching for maximum wealth, based on the graphical LP using POM software, the princes new
wealth will be 5,040 rupees resulted from the value of 12 ea of lion skins and 24 ea of coconuts.
In addition to that, their baggage capacity is fully utilized. The 15 cubit feet is used up by taking 12 x 1
cubit feet + 24 x 0.125 cubit feet.
Recommendation
Therefore it is recommended to them to bring 12 each of lion skins and 24 each of coconuts to fully
utilized the baggage capacity and maximize their new wealth.















Problem #2 : Mexicana Wire Works
Introduction
Ron Garcia felt good about his first week as a management trainee at Mexicana Wire Winding, Inc. He
had not yet developed any technical knowledge about the manufacturing process, but he had toured
the entire facily, located in the suburbs of Mexico City, and had met many people in various areas of the
operation.
Mexicana, a subsidiary of Westover Wire Works, a Texas firm, is a medium-sized producer of wire
windings used in making electrical transformers. Carlos Alverez, the production control manager,
described the windings to Garcia as being of standardized design. Garcias tour of the plant, laid out by
process type, followed the manufacturing sequence for the windings : drawing, extrusion, winding,
inspection and packaging. After inspection, good product is packaged and sent to finished product
storage; defective product is stored separately until it can be reworked.

Figure 2 Layout of the Plant
On March 8, Vivian Espania, Mexicanas general manager, stopped by Garcias office and asked him to
attend a staff meeting at 1:00 P.M.
Lets get started with the business at hand, Vivian said, opening the meeting. You all have met Ron
Garcia, our new management trainee. Ron studied operations management in his MBA program in
Southern California, so I think he is competent to help us with a problem we have been discussing for a
long time without resolution. Im sure that each of you on my staff will give Ron your full cooperation.
Vivian turned to Jose Arroyo, production control manager. Jose, why dont you describe the problem
we are facing?
Well, Jose said, business is very good right now. We are booking more orders than we can fill. We will
have some new equipment on line within the next several months, which will take care of our capacity
problems, but that wont help us in April. I have located some retired employees who used to work in
the drawing department, and I am planning to bring them in as temporary employees in April to
increase capacity there. Because we are planning to refinance some of our long-term debt, Vivian wants
our profits to look as good as possible in April. Im having a hard time figuring out which orders to run
and which to back order so that I can make the bottom line look as good as possible. Can you help me
with this?
Garcia was surprised and apprehensive to receive such an important high-profile assignment so early in
his career. Recovering quickly, he said, Give me your data and let me work with it for a day or two.
April Orders
Product W0075C 1,400 units
Product W0033C 250 units
Product W0005X 1,510 units
Product W0007X 1,116 units
Note : Vivian Espania has given her word to a key customer that
we will manufacture 600 units of product W0007X and 150 units
of product W0075C for him during April
Table 2 April Orders
Standard Cost
PRODUCT MATERIAL LABOR OVERHEAD SELLING PRICE
W0075C $33.00 $9.90 $23.10 $100.00
W0033C 25.00 7.50 17.5 80.00
W0005X 35.00 10.50 24.50 130.00
W0007X 75.00 11.25 63.75 175.00
Selected Operating Data
Average output per month = 2,400 units
Average machine utilization = 63%
Average percentage of production set to rework department = 5%
(mostly from Winding Department
Average no. of rejected units awaiting rework = 850 (mostly from
Winding Department)
Table 3 Standard Cost and Selling Price
Plant Capacity (Hours)
DRAWING EXTRUSION WINDING PACKAGING
4,000 4,200 2,000 2,300
Note: Inspection capacity is not a problem, we can work
overtime, as necessary, to accommodate any schedule.
Table 4 Plant Capacity
Bill of Labor (Hours/Unit)
PRODUCT DRAWING EXTRUSION WINDING PACKAGING
W0075C 1.0 1.0 1.0 1.0
W0033C 2.0 1.0 3.0 0.0
W0005X 0.0 4.0 0.0 3.0
W0007X 1.0 1.0 0.0 2.0
Table 5 Bill of Labor
Problem
1. What recommendations should Ron Garcia make, with what justification? Provide a detailed
analysis with charges, graphs, and computer printouts included.
2. Discuss the need for temporary workers in the drawing department.
3. Discuss the plant layout.
Solution
As a business entity, the maximization of profit is the primary objective. The possible secondary
objectives are commitments to customers, company reputation and quality of the products.
Profits is revenue minus costs. The revenue is taken from the sales of every single unit of products. The
costs in this case are the costs for material, labor and overhead. We can then modify Table 3 into a table
mentioning the profits for every single unit of each product.
Profits
PRODUCT MATERIAL LABOR OVERHEAD COST SELLING
PRICE
PROFITS
W0075C $33.00 $9.90 $23.10 $66.00 $100.00 $34.00
W0033C $25.00 $7.50 $17.50 $50.00 $80.00 $30.00
W0005X $35.00 $10.5 $24.5 $70.00 $130.00 $60.00
W0007X $75.00 $11.25 $63.75 $150.00 $175.00 $25.00
Table 6 Cost, Selling Price and Profits per Unit
Let:
X1 : Number of Product W0075C produced
X2 : Number of Product W0033C produced.
X3 : Number of Product W0005C produced
X4 : Number of Product W0007C produced
Then to objective function will be :

MAXIMIZE 34X1 + 30X2 + 60X3 + 25X4 .(1)

Vivian has given her words to a key customer that they are going to manufacture 600 units of X4 and
150 units of X1. Then we have:

X1 150 (2)
X4 600
For each process, there are boundaries regarding the hour of plant capacity as follow:

PRODUCTS
Maximum
Plant
Capacity
(Hours)
W0075C W0033C W0005C W0007C
(X1) (X2) (X3) (X4)
DRAWING 1 2 - 1 4,000
EXTRUSION 1 1 4 1 4,200
WINDING 1 3 - - 2,000
PACKAGING 1 - 3 2 2,300
Table 7 Plant Capacity
X1 + 2X2 + X4 4,000
(3)
X1 + X2 +4X3 + X4 4,200
X1 + 3X2 2,000
X1 +3X3 + 2X4 2,300

If we assume that Mexicana Wire Works works based on order then :
X1 1,400
X2 250 (4)
X3 1,510
X4 1,116



Thus, we will have the following model :
Objective : Z: f(X1,X2,X3,X4) = MAX {34X1 + 30X2 + 60X3 + 25X4 }
Constraints: X1 150
X4 600
X1 + 2X2 + X4 4,000
X1 + X2 +4X3 + X4 4,200
X1 + 3X2 2,000
X1 +3X3 + 2X4 2,300
X1 1,400
X2 250
X3 1,510
X4 1,116
X1 , X2 0
By entering the model given above to the POM software table :
Mexicana Wire Works Solution
X1 X2 X3 X4 RHS Dual
Maximize 34 30 60 25
Constraint 1 1 0 0 0 >= 150 0
Constraint 2 0 0 0 1 >= 600 -43
Constraint 3 1 2 0 1 <= 4000 0
Constraint 4 1 1 4 1 <= 4200 0
Constraint 5 1 3 0 0 <= 2000 0
Constraint 6 1 0 3 2 <= 2300 34
Constraint 7 1 0 0 0 <= 1400 0
Constraint 8 0 1 0 0 <= 250 30
Constraint 9 0 0 1 0 <= 1510 0
Constraint 10 0 0 0 1 <= 1116 0
Solution-> 1100 250 0 600 59900
Table 8 POM Software Result
Assuming that by doubling the number of worker we can reduce the labor time in drawing department
by 50% .but also increase the labor cost by 32% (4,000 hours out of total 12,500 hours). The following
model is the modified model after reconsidering the labor time and labor cost :
Objective : Z: f(X1,X2,X3,X4) = MAX {30.83X1 + 27.60X2 + 56.64X3 + 21.40X4 }
Constraints: X1 150
X4 600
0.5X1 + X2 + 0.5X4 4,000
X1 + X2 +4X3 + X4 4,200
X1 + 3X2 2,000
X1 +3X3 + 2X4 2,300
X1 1,400
X2 250
X3 1,510
X4 1,116
X1 , X2 0
The result is given in the following table :
Mexicana Wire Works Solution
X1 X2 X3 X4 RHS Dual
Maximize 30.83 27.6 56.64 21.4
Constraint 1 1 0 0 0 >= 150 0
Constraint 2 0 0 0 1 >= 600 -40.26
Constraint 3 .5 1 0 .5 <= 4000 0
Constraint 4 1 1 4 1 <= 4200 0
Constraint 5 1 3 0 0 <= 2000 0
Constraint 6 1 0 3 2 <= 2300 30.83
Constraint 7 1 0 0 0 <= 1400 0
Constraint 8 0 1 0 0 <= 250 27.6
Constraint 9 0 0 1 0 <= 1510 0
Constraint 10 0 0 0 1 <= 1116 0
Solution-> 1100 250 0 600 53653
Table 9 POM Software Result After Increase the Drawing Dept Headcounts
Conclusion
By searching for maximum profits, based on the LP using POM software, the maximum profits will be
$59,900 resulted from the manufacturing 1,100 units of W0075C , 250 units of W0033C , and 600 units
of W0007X . The result also suggests not to produce W0005C product.
By adding more headcounts in the drawing department, it is going to reduce the labor time yet it
increases the labor cost up to 32%. According to the result from POM software, the quantity of the
product still the same, yet it is not a change for better but for less profit ($53,653) due to no increase in
the pricing but burdened by the increased cost.
Recommendation
It is for maximum profits to produce 1,100 units of W0075C , 250 units of W0033C , and 600 units of
W0007X. Company must turn down the orders to produce 1,510 units of W0005X. It is better for the
company not to increase the number of employee in the drawing department in order to keep the cost
down.