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Lets say, A Production Manger of a drug company that can produce six products at

their plant. Production of each product requires labor and raw material.
Row 4 in Excel Workbook Productmix.xls gives the hours of labor needed to produce a
pound of each product,
Row 5 gives the pounds of raw material needed to produce a pound of each product.
For example, producing a pound of product 1 requires 6 hours of labor and 3.2
pounds of raw material.
For each drug, the price per pound is given in row 6, the unit cost per pound is given in
row 7, and the profit contribution per pound is given in row 9.
For example, product 2 sells for $11.00 per pound, incurs a unit cost of $5.70 per
pound, and contributes $5.30 profit per pound.
This months demand for each drug is given in row 8. For example, demand for product
3 is 1041 pounds.
This month, 4500 hours of labor and 1600 pounds of raw material are available.
How can this company maximize its monthly profit?
Our labor usage is given by
(Labor used per pound of drug 1)*(Drug 1 pounds produced) + (Labor used per pound of drug 2)*(Drug 2 pounds
produced) +
(Labor used per pound of drug 6)*(Drug 6 pounds produced)

We could compute labor usage in a tedious fashion as D2*D4 + E2*E4 + F2*F4 + G2*G4
+ H2*H4 + I2*I4.
Similarly, raw material usage could be computed as D2*D5 + E2*E5 + F2*F5 + G2*G5
+ H2*H5 + I2*I5.
OR Make use of Excel function =SUMPRODUCT(Array_1,Array_2)
In a similar way, our profit is given by

(Drug 1 profit per pound)*(Drug 1 pounds produced) + (Drug 2 profit per pound)* (Drug 2 pounds produced) +
(Drug 6 profit per pound)*(Drug 6 pounds produced).

Profit is easily computed in cell D12 with the formula =SUMPRODUCT(D9:I9,$D$2:$I$2).


We now can identify the three parts of our product mix Solver model.
Target cell Our goal is to maximize profit (computed in cell D12).
Changing cells The number of pounds produced of each product (listed in the cell
range D2:I2).
Constraints We have the following constraints:
Do not use more labor and raw material than are available. That is, the values in cells
D14:D15 (resources used) must be less than or equal to the values in cells F14:F15 (the
available resources).

Do not produce more of a drug than is in demand. That is, the values in the cells D2:I2
(pounds produced of each drug) must be less than or equal to the demand for each drug
(listed in cells D8:I8).
We cant produce a negative amount of any drug.

Assignment 4
Q. 7
A computer manufacturing plant produces mice, keyboards, and video game joysticks.
The per-unit profit, per-unit labor usage, monthly demand, and per-unit machine-time
usage are given in the following table:
Profit/unit
Labor usage/unit
Machine time/unit
Monthly demand

Mice
$8
.2 hour
.04 hour
15,000

Keyboards
$11
.3 hour
.055 hour
25,000

Joysticks
$9
.24 hour
.04 hour
11,000

Each month, a total of 13,000 labor hours and 3000 hours of machine time are
available. How can the manufacturer maximize its monthly profit contribution from the
plant?
Q. 8
Jason the jeweler makes diamond bracelets, necklaces, and earrings. He wants to work
at most 160 hours per month. He has 800 ounces of diamonds. The profit, labor time,
and ounces of diamonds required to produce each product are given below. If demand
for each product is unlimited, how can Jason maximize his profit?
Product

Unit Profit

Bracelet
Necklace
Earrings

$300
$200
$100

Labor Hours Per


Unit
.35
.15
.05

Ounces of
Diamonds Per Unit
1.2
.75
.5

How can Cement Company determine the locations at which they


should produce Cement and from which they should ship Cement to
customers?
You can follow along with this problem by looking at the file Transport.xls.
Lets suppose a Cement company produces Cement in Gotan, Banswarda, and
Chittorgarh in Rajasthan, India.
The Gotan plant can produce up to 10,000 truck load of Cement per month.
Banswarda can produce up to 12,000 truck load of Cement per month, and
Chittorgarh can produce up to 14,000 truck load of Cement per month.
Each month, the company must ship to the four Regions East, Midwest, South, and
West.
The number of trucks listed in cells B2:E2, For example, the West region must receive at
least 13,000 trucks of the Cement each month to meet regional Demand.
The cost of producing per truck load Cement at each plant and shipping Cement to each
region are given in cells B4:E6 in Lakhs of Rupees. For example, it costs Rs. 3.50 Lakh to
produce a truck load of Cement in Gotan and ship it to the Midwest region.
What is the cheapest way to meet demand of each region?
Q. 9
The distances between Boston, Chicago, Dallas, Los Angeles, and Miami are given in the
following table.
Each city needs 40,000 kilowatt hours (kwh) of power, and Chicago, Dallas, and Miami
are capable of producing 70,000 kwh. Assume that shipping 1000 kwh over 100 miles
costs $4.00. From where should power be sent to minimize the cost of meeting each
citys demand?
Chicago
Dallas
Miami

Boston
983
1815
1539

Chicago
0
1205
1390

Dallas
1205
0
1332

LA
2112
801
2757

Miami
1390
1332
0

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