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Task 1: Scottsville Textile Mill Scheduling

(1.1) Formulate the problem


Defining the decision variables:
M1D =Number of Fabric 1 make by Dobbie loom
M2D = Number of Fabric 2 make by Dobbie loom
M3D = Number of Fabric 3 make by Dobbie loom
M3R = Number of Fabric 3 make by Regular loom
M4D = Number of Fabric 4 make by Dobbie loom
M4R = Number of Fabric 4 make by Regular loom
M5D = Number of Fabric 5 make by Dobbie loom
M5R = Number of Fabric 5 make by Regular loom
B1 = Number of Fabric 1 purchased
B2 = Number of Fabric 2 purchased
B3= Number of Fabric 3 purchased
B4= Number of Fabric 4 purchased
B5= Number of Fabric 5 purchased
(1.2)&(1.3) optimal production schedule
Profits from make:
Fabric
Selling price
Variable cost
($/yard)
($/yard)
1
0.99
(0.66)
2
0.86
(0.55)
3
1.10
(0.49)
4
1.24
(0.51)
5
0.7
(0.5)
Profits from buy:
Fabric
Selling price
Purchase price
($/yard)
($/yard)

Profit
($/yard)
0.33
0.31
0.61
0.73
0.2
Profit
($/yard)

1
0.99
0.8
0.19
2
0.86
0.7
0.16
3
1.10
0.6
0.50
4
1.24
0.7
0.54
5
0.70
0.7
0
Production times in hours per yard:
Fabric
Dobbie
Regular
(hours/yard)
(hours/yard)
1
1/4.63=0.215983 2
1/4.63=0.215983 3
1/5.23=0.191205 1/5.23=0.191205
4
1/5.23=0.191205 1/5.23=0.191205
5
1/4.17=0.239808 1/4.17=0.239808
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Defining the constraints


Demand constraints
M1D+ B1=16500
M2D + B2=22000
M3D +M3R +B3=62000
M4D +M4R +B4=7500
M5D +M5R +B5=62000
Loom constraints
Dobbie:
0.215983M1D + 0.215983M2D + 0.191205M3D + 0.191205M4D + 0.239808M5D 5760
(Dobbie hours available: 8Loom *30 days *24 hour/day =5760)
Regular:
0.191205M3R + 0.191205M4R + 0.239808M5R 21600
(Regular hours available: 30Loom* 30days* 24hours/day =21600)
Nonnegativity conditions
M1D ,M2D ,M3D ,M3R ,M4D ,M4R ,M5D ,M5R ,B1 ,B2 ,B3 ,B4 ,B5 0
(1.3)
after entering all appropriate parameters and choosing any necessary options for
model, the solver determined that the optimal amount for the final production
schedule is:
Fabric Make by

Dobbie

4668.8

22000

Regular

27707.808

7500

62000

11831.2

34292.192

Fabric purchase

Fabric1 purchase 11831.2 yards


Fabric1 Dobbie 4668.8 yards
Fabric2 purchase 0
Fabric2 Dobbie 22000 yards
Fabric3 purchase 34292.192 yards
Fabric3 Dobbie 0
Fabric3 regular 27707.808
Fabric4 purchase 0
Fabric4 Dobbie 0 ; Fabric4 regular 7500 yards
Fabric5 purchase 0
Fabric5 Dobbie 0
Fabric5 regular 62000 yards
assignment for each fabric
loom assignment for fabric 1:
2

Dobbie: 4668.8/4.63= 1008.3801


loom assignment for fabric 2:
Dobbie: 22000/4.63= 4751.6199
loom assignment for fabric 3:
Regular: 27707.808/5.23=5297.8601
loom assignment for fabric 4:
regular: 7500/5.23= 1434.0344
loom assignment for fabric 5:
regular: 62000/4.17= 14868.10552
(1.4)Maximize profit objective function:
=0.33M1D+0.31M2D+0.61M3D+0.61M3R+0.73M4D+0.73M4R+0.2M5D+0.2M5R+0.19B1+0
.16B2+0.50 B3+0.54B4+0B5
the objective in an optimization problem is represented mathematically by an
objective function, the objective function in Scottsville Textile Mill Scheduling
problem expresses the mathematical relationship between the decision variable(such
as the amount of the each fabric should be produced) in the model to determined the
maximize profit of the production. As the solve determined that the maximize profit is
$ 62531.49, and the profit from make is equal to $43137.47, profit from buy is equal
to $ 19394.02.
(1.5) Alternative way - Cost Minimizing
Costs from make:
Costs from buy:
Fabric
Variable cost ($/yard)
1
(0.66)
2
(0.55)
3
(0.49)
4
(0.51)
5
(0.5)
Fabric
Purchase price ($/yard)
1
0.8
2
0.7
3
0.6
4
0.7
5
0.7
Minimize cost objective function:
=0.66M1D+0.55M2D+0.49M3D+0.49M3R+0.51M4D+0.51M4R+0.5M5D+0.5M5R+0.8B1+0.
7B2+ 0.6B3+0.7B4+0.7B5
The minimizing cost value is 93623.5.
Above solution shows that production quantity for all fabric types are same in Profit
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maximization and Cost minimization model. therefore, both the profit maximization
and cost minimization models will provide the same optimal solution. However, the
coefficients of the objective function are different for the two model. In the cost
minimization model, the coefficients are costs per unit, therefore, the solutions allows
company to fill the order at a minimum cost of $ 93623.5. on the other hands, in the
profit maximization model, the coefficients are profit contributions per unit from
make or buy.
Task 2: The MasterDebt Lockbox
(2.1) Formulate the problem:
First we must calculate the losses due to lost interest for each possible assignment.
Defining the decision variables:
If the central sends to Sacramento, then on average there will be 4* 45= 180 (in
$1,000s) in process on any given day, interest rate of 15%, this corresponds to a
yearly loss of 27 (in $1,000s) then We can calculate the losses for the other
possibilities in a similar fashion to get follow table.
Annual Interest Loss($1,000s)
Sacramento
Denver
Chicago
Dallas
New York
Atlanta
Central
27.00
13.50
13.50
13.50
20.25
20.25
Mid-Atlantic
58.50
39.00
29.25
39.00
19.50
19.50
Midwest
22.50
15.00
22.50
15.00
37.50
30.00
Northeast
81.00
54.00
27.00
67.50
27.00
40.50
Northwest
21.00
31.50
52.50
42.00
63.00
73.50
Southeast
84.00
48.00
36.00
24.00
48.00
24.00
Southwest
18.00
27.00
54.00
18.00
63.00
54.00
Let Xij=be the decision to select or unselect check sent from the region i to lockbox j,
where i=1,2,3,4,5,6,7;j=1,2,3,4,5,6.

Let Yi= be the decision to select or unselected lockbox j , where i= Sacramento(S),


Denver (D), Chicago(C), Dallas(Da), New York(NY), Atlanta(A).

Minimize total yearly loss objective function:


=27X11+13.5X12+13.5X13+13.5X14+20.25X15+20.25X16..
+25YS+30YD+35YC+35YDA+30YNY+35YA
MIN

where RI
CI
(2.2)&(2.3) Optimal solution
Defining the constraints:
Binary constraints:
All Xij must be binary
All YI must be binary
All Xij must be integer
Nonnegative condition:
X11+X12+X13+X14+X15+X16 =1
X21+ X22+X23+X24+X25+X26 =1
X31+X32+X33+X34+X35+X36=1
X41+X42+X43+X44+X45+X46=1
X51+X52+X53+X54+X55+X56=1
X61+X62+X63+X64+X65+X66=1
Or,
Linking constrain( with big M)
X11+X21+X31+X41+X51+X61+X717YS OR X11+X21+X31+X41+X51+X61+X71-7Ys0
X12+X22+X32+X42+X52+X62+X727YD OR X12+X22+X32+X42+X52+X62+X72-7YD0
X13+X23+X33+X43+X53+X63+X737YC OR X13+X23+X33+X43+X53+X63+X73-7YC0
X14+X24+X34+X44+X54+X64+X747YDA OR X14+X24+X34+X44+X54+X64+X74-7YDA0
X15+X25+X35+X45+X55+X65+X757YNY OR X15+X25+X35+X45+X55+X65+X75-7YNY0
X16+X26+X36+X46+X56+X66+X767YA OR X16+X26+X36+X46+X56+X66+X76-7YA0

(2.4) The total costs are 224,000 and MasterDebt should use Dallas for Central,
Midwest, Northwest, Southeast and Southwest while New York for Mid-Atlantic and
Northeast.
(2.5) The total costs are 227,500 when a maximum of four regions could be assigned
to any lockbox location and MaterDebt should use Sacramento for Midwest,
Northwest and Southwest while Atlanta for Central, Northeast, Southeast, MidAtlantic.
Task 3: Brief Report
The objectives of the assignment are to complete two problems with three tasks. We
have established a schedule since week 3 and made regular meeting time at three
times a week which was right after the class on Monday, Tuesday and the other one
was held during weekend with two hours each time discussions. Based on the
exercises and knowledge learnt from lectures and tutorials, we solved the problems
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with Excel together during the meeting and discussed how to put them into the Word.
In conclusion, our group has been effective at collaborating on this assignment and
successful at developing a plan while each member has been following through with
their responsibilities.