Assignment one S2 2011-12

Question 1 A

On their farm, the Friendly family grows apples that they harvest each fall and make into three
products apple butter, applesauce, and apple jelly. They sell these three items at several local
grocery stores, at craft fairs in the region, and at their own Friendly Farm Pumpkin Festival for 2
weeks in October. Their three primary resources are cooking time in their kitchen, their own
labor time, and the apples. They have a total of 500 cooking hours available, and it requires 3.5
hours to cook a 10-gallon batch of apple butter, 5.2 hours to cook 10 gallons of applesauce, and
2.8 hours to cook 10 gallons of jelly. A 10-gallon batch of apple butter requires 1.2 hours of
labor, a batch of sauce takes 0.8 hour, and a batch of jelly requires 1.5 hours. The Friendly
family has 240 hours of labor available during the fall. They produce about 6,500 apples each
fall. A batch of apple butter requires 40 apples, a 10-gallon batch of applesauce requires 55
apples, and a batch of jelly requires 20 apples. After the products are canned, a batch of apple
butter will generate $190 in sales revenue, a batch of applesauce will generate a sales revenue of
$170, and a batch of jelly will generate sales revenue of $155. The Friendlys want to know how
many batches of apple butter, applesauce, and apple jelly to produce in order to maximize their
revenues.

a. Formulate a linear programming model for this problem. Solve the model by using the
computer. Please see the related template. 15 marks

Objective function – 2 marks

4 constraints including nonnegative- 2 marks each

Solving by computer- 5 marks

Question 1B

Working with chemists at Virginia Tech and George Washington Universities, landscape
contractor Kenneth Golding blended his own fertilizer, called “Golding-Grow.” It consists of
four chemical compounds, C-30, C-92, D-21, and E-11. The cost per pound for each compound
is indicated as follows:

The specifications for Golding-Grow are as follows:

(1) E-11 must constitute at least 15% of the blend;
(2) C-92 and C-30 must together constitute at least 45% of the blend;
(3) D-21 and C-92 can together constitute no more than 30% of the blend; and
(4)Golding-Grow is packaged and sold in 50-pound bags.

Formulate an LP problem to determine what blend of the four chemicals will allow Golding to minimize
the cost of a 50-pound bag of the fertilizer. 10 marks

Objective function – 2.5 marks

5 Constraints including nonnegative – 1.5 marks each

Question 2

Better Products, Inc., manufactures three products on two machines. In a typical week, 40 hours
are available on each machine. The profit contribution and production time in hours per unit are
as follows:

Category Product 1 Product 2 Product 3

Profit/unit $30 $50 $20
Machine 1 time/unit 0.5 2.0 0.75
Machine 2 time/unit 1.0 1.0 0.5

Two operators are required for machine 1; thus, 2 hours of labor must be scheduled for each
hour of machine 1 time. Only one operator is required for machine 2. A maximum of 100 labor-
hours is available for assignment to the machines during the coming week. Other production
requirements are that product 1 cannot account for more than 50% of the units produced and that
product 3 must account for at least 20% of the units produced.

Answer the following questions (a-i) using the output below please be brief. If there are two possible
answers one will suffice. Where necessary a range analysis must be shown.

a) What is the optimal solution ( in words? (2 marks)

b) Five (5) hours of machine 1 were lost due to repairs. Evaluate the effect? Explain-( 3
marks)
c) An additional seven hours of machine 2 became available. Evaluate the effect? (3
marks)
d) An additional 20 hours of labour became available. Evaluate the effect(2 -marks
e) The profit per unit for product 2 decreased by $5.Evaluate the effect (3 marks)
f) What are the allowable values within which maximum production for product 1 vary
without affecting the shadow price?- (2 marks)
g) Is the problem degenerate? Explain! (2 marks)
h) Are there alternative optima in this problem? Explain (2 marks)
i) What value should be in the slack column that is given by ???? (1 mark)
number of units 24 8 16
profit 30 50 20 1440
constraints
machine 1 0.5 2 0.75 40 <= 40
machine 2 1 1 0.5 40 <= 40
labor hrs 1 1 1 48 <= 100
-1.8E-
max prod 1 0.5 -0.5 -0.5 15 <= 0
Min prodt 3 -0.2 -0.2 0.8 6.4 >= 0
LHS SIGN RHS

Microsoft Excel 12.0 Answer Report

Worksheet: [Assignment and Exam question bank S2 2011-12.xls]LP GA s22011-12 (2)
Report Created: 2/27/2012 5:50:16 PM
Target Cell (Max)
Original
Cell Name Value Final Value
$E$4 profit 0 1440

Adjustable Cells
Original
Cell Name Value Final Value
$B$3 number of units product 1 0 24
$C$3 number of units product 2 0 8
$D$3 number of units product 3 0 16

Constraints
Cell Name Cell Value Formula Status Slack
$E$6 machine 1 40 $E$6<=$G$6 Binding 0
$E$7 machine 2 40 $E$7<=$G$7 Binding 0
Not
$E$8 labor hrs 48 $E$8<=$G$8 Binding ???
$E$9 max prod 1 0 $E$9<=$G$9 Binding 0
Not
$E$10 Min prodt 3 6.4 $E$10>=$G$10 Binding 6.4
Microsoft Excel 12.0 Sensitivity Report
Worksheet: [Assignment and Exam question bank S2 2011-12.xls]LP GA s22011-12
(2)
Report Created: 2/27/2012 5:50:16 PM
Adjustable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$
3 number of units product 1 24 0 30 40 10
$C$
3 number of units product 2 8 0 50 20 5
$D$ 1.66666666
3 number of units product 3 16 0 20 7 10

Constraints
Shado Constrain
Final w t Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$E$6 machine 1 40 16 40 4.444444444 6.666666667
$E$7 machine 2 40 20 40 8 4
$E$8 labor hrs 48 0 100 1E+30 52
$E$9 max prod 1 0 4 0 2.962962963 10

$E$10 Min prod 3 6.4 0 0 6.4 1E+30

Question 3
Courts OECS Appliance Center sells and services several brands of major appliances. Past sales
for a particular model of refrigerator have resulted in the following probability distribution for
demand:

Based on cost considerations as well as storage space, the company has decided to order 10 of
these each time an order is placed. . There is no lead time since orders made are received the
next week in time for sale. The holding cost is $1 per week for each unit that is left in inventory
at the end of the week. The stockout cost has been set at $40 per stockout. The order cost is
$2.00. The company has decided to place an order whenever there are only two refrigerators left
at the end of the week. Simulate 10 weeks of operation for Courts OECS Appliance assuming
there are currently 5 units in inventory.
Required

a) construct the appropriate random number mappings for the random variable( 4 marks)
b) Simulate 10 week by using random numbers given below.(12 marks)
c) What is the total average cost of this policy.(4 marks)

Random Numbers To Be Used in the Simulation

Week 1 2 3 4 5 6 7 8 9 10

Demand 0.57 0.59 0.8 0.19 0.82 0.91 0.02 0.11 0.81 0.84

Use the following headings

Week OI UR AI RN D D F EI SO P.O IC SOC OC

Week, open inventory (OI), units received (UR), Available inventory (AI), RN, demand (D), demand
filled (DF), ending inventory (EI), stock outs (SO), place order (PO), inventory cost(IC), stock out cost
(SOC), order cost (OC)