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Chapter 3

Applications of Linear and


Integer Programming
Models - 2
1

3.5 Applications of Integer


Linear Programming Models
Many real life problems call for at least one integer
decision variable.
There are three types of Integer models:

Pure integer (AILP)


Mixed integer (MILP)
Binary (BILP)

The use of binary variables in


constraints

AAny decision situation that can be modeled by


yes/no, good/bad etc., falls into the binary
category.

To illustrate

1 If a new health care plan is adopted


X 0 If it is not

1 If a new police station is built downtown


X 0 If it is not

1 If a particular constraint must hold


X 0 If it is not

The use of binary variables in


constraints

Example
A decision is to be made whether each of three plants should be
built (Yi = 1) or not built (Yi = 0)
Requirement
Binary Representation

At least 2 plants must be built


Y1 + Y2 + Y3 2
If plant 1 is built, plant 2 must not be built
Y1 + Y2 1
If plant 1 is built, plant 2 must be built
Y1 Y2
One, but not both plants must be built
Y 1 + Y2 = 1
Both or neither plants must be built
Y1 Y2 =0
Plant construction cannot exceed $17 million
given the costs to build plants are $5, $8, $10 million 5Y1+8Y2+10Y3 17

The use of binary variables in


constraints

Example - continued

Two products can be produced at a plant.


Product 1 requires 6 pounds of steel and product 2 requires 9 pounds.
If a plant is built, it should have 2000 pounds of steel available.

The production of each product should satisfy the steel


availability if the plant is opened, or equal to zero if the plant is
not opened.

6X1 + 9X2 2000Y1

If the plant is built Y1 = 1.


The constraint becomes
6x1 + 9X2 2000

If the plant is not built Y1 = 0.


The constraint becomes
6x1 + 9X2 0, and thus,
X1 = 0 and X2 = 0

3.5.1 Personnel Scheduling Models


Assignments of personnel to jobs under
minimum required coverage is a typical integer
problems.
When resources are available over more than
one period, linking constraint link the resources
available in period t to the resources available in
a period t+1.

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Sunset Beach Lifeguard Assignments

The City of Sunset Beach staffs lifeguards 7 days a


week.
Regulations require that city employees work five days.

Insurance requirements mandate 1 lifeguard per 8000


average daily attendance on any given day.

The city wants to employ as few lifeguards as possible.


9

Sunset Beach Lifeguard Assignments

Problem Summary
Schedule lifeguard over 5 consecutive days.
Minimize the total number of lifeguards.
Meet the minimum daily lifeguard requirements
Sun. Mon. Tue. Wed. Thr. Fri. Sat.
8
6
5
4
6
7
9

10

Sunset Beach Lifeguard Assignments

Decision Variables
Xi = the number of lifeguards scheduled to begin on day i
for i=1, 2, ,7 (i=1 is Sunday)

Objective Function
Minimize the total number of lifeguard scheduled

Constraints
Ensure that enough lifeguards are scheduled each day.
11

Sunset Beach Lifeguard Assignments


To ensure that enough lifeguards are scheduled for
each day, identify which workers are on duty.
For example:

12

Sunset Beach Lifeguard Assignments


Who works on Friday ?

Who works on Saturday ?


X2
X3
X4
X5
X6

X3
X4
X5
X6
X1

Mon Tue. Wed. Thu. Fri. Sat Sun.

Repeat this procedure for each day of the week, and


build the constraints accordingly.
13

Sunset Beach Lifeguard Assignments


Min X1 + X2 + X3 + X4 + X5 + X6 + X7
S.T.

X1 + X4 + X5 + X6 + X7

X1 + X2 + X5 + X6 + X7 6
X1 +
X2 + X3 + X6 + X7 5
X1 +
X2 + X3 + X4 + X7 4
X1 + X2 + X3 + X4 + X5

X2 + X3 + X4 + X5 + X6

X3 + X4 + X5 + X6 + X7

All the variables are non negative integers

14

Sunset Beach Lifeguard Assignments

15

Sunset Beach Lifeguard Assignments

16

Sunset Beach Lifeguard Assignments


OPTIMAL ASSIGNMENTS
LIFEGUARDS
DAY
SUNDAY
MONDAY
TUESDAY
WEDNESDAY
THURSDAY
FRIDAY
SATURDAY

Note: An alternate
optimal solution exists.

PRESENT

REQUIRED

BEGIN SHIFT

9
8
6
5
6
7
9

8
6
5
4
6
7
9

1
0
1
1
3
2
2

TOTAL LIFEGUARDS

10

17

3.5.2 Project selection Models


These models involve a go/no-go situations, that
can be modeled using binary variables.
Typical elements in such models are:

Budget
Space
Priority conditions

18

Salem City Council Project Selection


The Salem City Council needs to decide how to
allocate funds to nine projects such that public
support is maximized.
Data reflect costs, resource availabilities, concerns
and priorities the city council has.

19

Salem City Council Project Selection


Survey results
Project
X1 Hire seven new police officers
X2 Modernize police headquarters
X3 Buy two new police cars
Give bonuses to foot patrol officers
X4
Buy new fire truck/support equipment
X5 Hire assistant fire chief
X6 Restore cuts to sport programs
X7 Restore cuts to school music
X8 Buy new computers for high school

Cost (1000)
$
400.00
$
350.00
$
50.00
$
100.00
$
500.00
$
90.00
$
220.00
$
150.00
$
140.00

Jobs
7
0
1
0
2
1
8
3
2

Points
4176
1774
2513
1928
3607
962
2829
1708
3003

X9

20

Salem City Council Project Selection

Decision Variables:
Xj- a set of binary variables indicating if a project j is
selected (Xj=1) or not (Xj=0) for j=1,2,..,9.

Objective function:
Maximize the overall point score of the funded projects

Constraints:
See the mathematical model.
21

Salem City Council Project Selection

The Mathematical Model

(Xi = 0,1 for i=1, 2, 9)

Max 4176X1+1774X2+ 2513X3+1928X4+3607X5+962X6+2829X7+1708X8+3003X9


S.T.

The maximum amounts of funds to be allocated is $900,000


400X1+ 350X2+

50X3+

100X4+ 500X5+ 90X6+ 220X7+ 150X8+ 140X9 900

The number of new jobs created must be at least 10


7X1+

X3+

2X5+

X6+

8X7+

3X8+

2x9

The number of police-related activities selected is at most 3 (out of 4)


X1+

X2+

X3+

X4

Either police car or fire truck be purchased


X3+

X5

= 1

Sports funds and music funds must be restored / not restored together
X7 -

Sports funds and music funds must be


restored before computer equipment
is purchased

10

X8

= 0

X9 0

X7 x8 -

x9

22

Salem City Council Project selection

=SUMPRODUCT(B4:B12,E4:E1
=SUMPRODUCT(B4:B12,C4:C12)
2)
=SUMPRODUCT(B4:B12,D4:D12)
=SUM(B4:B7)
=B6+B8
=B10-B11
=B10-B12
=B11-B12

23

3.5.3 Supply Chain Management

Supply chain management models integrate the


manufacturing process and the distribution of goods to
customers.
The overall objective of these models is to minimize total
system costs
The requirements concern (among others)

Appropriate production levels


Maintaining a transportation system to satisfy demand in timely
manner.
24

Globe Electronics, Inc.


Globe Electronics, Inc. manufactures two styles of
remote control cable boxes, G50 and H90.
Globe runs four production facilities and three
distribution centers.
Each plant operates under unique conditions, thus
has a different fixed operating cost, production
costs, production rate, and production time
available.

25

Globe Electronics, Inc.


Demand has decreased, and management is
contemplating closing one or more of its facilities.
Management wishes to:

Develop an optimal distribution policy.


Determine which plant to close (if any).

26

Globe Electronics, Inc.

Data
Production costs, Times, Availability

Plant
Plant
Philadelphia
Philadelphia
St.
St.Louis
Louis
New
NewOrleans
Orleans
Denver
Denver

Fixed
FixedCost
Cost
per
perMonth
Month
40
40
35
35
20
20
30
30

Production
ProductionCost
Cost/ /unit
unit
G50
H90
G50
H90
10
14
10
14
12
12
12
12
88
10
10
13
15
13
15

Production
ProductionTime
Time(hr/unit)
(hr/unit) Available
Availablehrhr
G50
H90
per
G50
H90
perMonth
Month
0.06
0.06
640
0.06
0.06
640
0.07
0.08
960
0.07
0.08
960
0.09
0.07
480
0.09
0.07
480
0.05
0.09
640
0.05
0.09
640

Monthly Demand Projection


G50
G50
G90
G90

Demand
Demand
Cincinnati
Cincinnati Kansas
KansasCitySan
CitySanFrancisco
Francisco

2000
2000
5000
5000

3000
3000
6000
6000

5000
5000
7000
7000

27

Globe Electronics, Inc.

Transportation Costs per 100 units


Cincinnati
Philadelphia

$200

Kansas
City
300

St.Louis
New Orleans
Denver

100
200
300

100
200
100

San
Francisco
500
400
300
100

At least 70% of the demand in each distribution center


must be satisfied.
Unit selling price

G50 = $22;

H90 = $28.
28

Globe Electronics, Inc.

The Globe problem

Ordering raw material


Scheduling personnel

Production
1. Production level for
each product
in each plant.
2. Distribution plan.

Distribution centers
1. Storage
2. Sale and Dissemination
to retail establishments

29

Globe Electronics, Inc. - Variables


Transportation variables
Philadelphia

St. Louis

1
2

G11 , H
G1 , 11
G 2 H12
13 ,
H

Cincinnati

Kansas City

San Francisco

13

G22 , H

22

G 31,

New Orleans

H 31

,1 H 41

G4

Denver

4
30

Globe Electronics, Inc. - Variables


Production variables in each plant
Philadelphia

G1111, H
G11 , 11
22 H
12 G
G
G
11
13 ,
H 12

Cincinnati

G13 GG1112
G22 , H
2
St. Louis
G13 G12
22
G13G12
H 31
,
G
G 31
11
Kansas City
G132
G12
G
11
New Orleans 3
G13
G11
G12 G13
G311
San
Francisco
G
G
12
11
Denver
G13
4
G
G
11
12
G
11
G13
G
G
11
12
Total production of G50 in Philadelphia = GP = G
G1111 + GG1212 + GG1313
13

31

Globe Electronics, Inc. - Variables


Shipment variables to each distribution center
Philadelphia

St. Louis

1
2

G11 , H
G1 , 11
2 H
12
G
13 ,
H

Denver

Cincinnati

Kansas City

San Francisco

13

G22 , H

22

H 31
G 31,

New Orleans

Total shipment of H90 to Cincinnati = HC = H11 + H21 + H31 +H41

32

Globe Electronics
Model No. 1:
All The Plants Remain Operational

33

Globe Electronics all plants opened

Objective function
Max Gross Profit = 22(Total G50)+28(Total H90) Total
Production Cost Total transportation Cost =
Max 22G + 28H
G = total number of
G50 produced
H = total number of
H90 produced

34

Globe Electronics all plants opened

Objective function

Max Gross Profit = 22(Total G50)+28(Total H90) Total


Production Cost Total transportation Cost =
Max 22G + 28H
10GP 12GSL 8GNO 13GD
Production costs
14HP 12HSL 10HNO 15HD
2G11 3G12 5G13
1G21 1G22 4G23
2G31 2G32 3G33
3G41 1G42 1G43

2H11 3H12 5H13


1H21 1H22 4H23
2H31 2H32 3H33
3H41 1H42 1H43

Transportation costs

35

Globe Electronics all plants opened

Constraints:
Ensure that the amount shipped from a plant equals the amount
produced in a plant (summation constraints).

For G50

For H90

G11 + G12 + G13 = GP


G21 + G22 + G23 = GSL
G31 + G32 + G33 = GNO
G41 + G42 + G43 = GD

H11 + H12 + H13 = HP


H21 + H22 + H23 = HSL
H31 + H32 + H33 = HNO
H41 + H42 + H43 = HD

The amount received by a distribution center is equal to all the


shipments made to this center (summation constraints).

For G50

For H90

G11 + G21 + G31 + G41 = GC

H11 + H21 + H31 + H41 = HC

G12 + G22 + G32 + G42 = GKC

H12 + H22 + H32 + H42 = HKC

G +G +G +G =G

H +H +H +H =H

36

Globe Electronics all plants opened

Constraints

The amount shipped to each distribution center is at least 70% of


its projected demand.
The amount shipped to each distribution center does not exceed
its demand.
Cincinnati:

GC 1400
HC 3500

GC 2000
HC 5000

Kansas City

GKC 2100
HKC 4200

GKC 3000
HKC 6000

San Francisco

GSF 3500
HSF 4900

GSF 5000
HSF 7000

37

Globe Electronics all plants opened

Constraints:

Production time used at each plant cannot exceed the time


available:
.06GP + .0 6HP 640
.07GSL+ .08HSL 960
.09GNO + .07HNO 480
.05GD + .09HD 640
All the variables are non negative

38

Globe Electronics all plants opened spreadsheet


=F10*F9+F19*F18SUMPRODUCT(G23:G26,F5:F8)
SUMPRODUCT(H23:H26,F14:F17
)SUMPRODUCT(C5:E8,C23:E26)SUMPRODUCT(C14:E17,C23:E26
)-SUM(F23:F26)
=$I23*$F5+$J23*$F14
Drag to L24:L26

39

Globe Electronics 1 - Summary

The optimal value of the objective function is $356,571.43


Note that the fixed cost of operating the plants was not
included in the objective function because all the plants
remain operational.
Subtracting the fixed cost of $125,000 results in a net
monthly profit of $231,571.43
Rounding down several non-integer solution values results
in an integral solution with total profit of $231,550.
This solution may not be optimal, but it is very close to it.
40

Globe Electronics Model No. 2:


The number of plants that remain
operational in each city is a
decision variable.

41

Globe Electronics which plant


remains opened?
High set up costs raise the question:
Is it optimal to leave all the plants operational?
Using binary variables the optimal solution
provides suggestions for:

Production levels for each product in each plant,


Transportation pattern from each plant to distribution
center,
Which plant remains operational.

42

Globe Electronics which plant


remains opened?
Binary Decision Variables
Yi = a binary variable that describes the number of
operational plants in city i.

Objective function
Subtract the following conditional set up costs from the previous
objective function:
40,000YP + 35,000YSL + 20,000YND + 30,000YD

Constraints
Change the production constraints
.06GP + .0 6HP

640YP

.09GNO + .07HNO 480YNO

.07GSL+ .08HSL 960YSL


.05GD + .09HD 640YD

43

Globe Electronics which plant


remains opened?
=F10*F9+F19*F18SUMPRODUCT(G23:G26,F5:F8) SUMPRODUCT(H23:H26,F14:F17)
-SUMPRODUCT(C5:E8,C23:E26)SUMPRODUCT(C14:E17,C23:E26)
-SUMPRODUCT(F23:F26,A5:A8)

44

Globe Electronics 2 - Summary

The Philadelphia plant should be closed, while the other


plants work at capacity.
Schedule monthly production according to the quantities
shown in the Excel output.
The net monthly profit will be $266,083 (after rounding
down the non-integer variable values), which is $34,544
per month greater than the optimal monthly profit
obtained when all four plants are operational.
45

Appendix 3.4 (CD): Advertising Models

46

Appendix 3.4 (CD): Advertising Models

Many marketing situations can be modeled by linear


programming models.
Typically, such models consist of:

Budget constraints,
Deadlines constraints,
Choice of media,
Exposure to target population.

The objective is to achieve the most effective advertising


plan.
47

Vertex Software, Inc.

Vertex Software has developed a new software product,


LUMBER 2000.

A marketing plan for this product is to be developed for the


next quarter.

The product will be promoted using black and white and colored full
page ads.
Three publications are considered:
Building Today
Lumber Weekly
Timber World

48

Vertex Software, Inc.

Requirements

A maximum of one ad should be placed in any one issue of any of


the publication during the quarter.

At least 50 full-page ads should appear during the quarter.

at least 8 color ads should appear during the quarter.

One ad should appear in each issue of Timber World.

At least 4 weeks of advertising should be placed in each of the


Building Today and Lumber Weekly publications.

No more than $ 40000 should be spent on advertising in any one of


the trade publications.

49

Vertex Software, Inc.


Circulation and advertising costs
Publication
Frequency
Building Today
5 day/week
Half pg.: $500
Only B&W
Lumber Weekly Weekly
Color pg.: $4000
Timber World
Monthly
Color pg.: $6000

Circulat.
Cost/Ad
400,000 Full pg.:
$800

250,000 B&W pg.: $1500


200,000 B&W pg.: $2000

Key reader attitudes


Attribute
Rating
Computer data-base user
Large Firm (>2M sales)
Location (city / suburb)

Percentage of Readership
Bldng. Lumbr Timber
.50
60%
80
.25
40
80
.15
60
60

90
80
80

Age of firm (>5 years)

.10

50

20

40

50

Vertex Software, Inc.

Solution
The requirements are:
Stay within a $90,000 budget for print advertising.
Place no more than 65 ads(=5 x 13 weeks) and no less than 20 ads
(=5 X 4 weeks) in Building Today.
Place no more than 13 and no less than 4 ads in Lumber Weekly.
Place exactly 3 ads in Timber World.
Place at least 50 full-page ads.
Place at least 8 color ads.
Spend no more than $40,000 on advertisement in any one of the trade
publications.

51

Vertex Software, Inc.

Variables

X1 = number of full page B&W ads placed in


X2 = number of half page B&W ads placed in
X3 = number of full page B&W ads placed in
X4 = number of full page color ads placed in
X5 = number of full page B&W ads placed in
World
X6 = number of full page color ads placed in
World

Building Today
Building Today
Lumber Weekly
Lumber Weekly
Timber
Timber

52

Vertex Software, Inc.

The Objective Function

The objective function measures the effectiveness of the


promotion operation (to be maximized).

It depends on the number of ads in each publication, as

well as on the relative effectiveness per ad.


A special technique (external to this problem) is applied to
evaluate this relative effectiveness.
53

Vertex Software, Inc.


=SUMPRODUCT($B$6:$B$9,C6:C9)
Drag to cells D11 and E11

=C$11*C$13*$B17
Drag across to D17:E17
then down to C19:E19.
Then delete formulas in
cells C17,D19, and E19

54

Vertex Software, Inc.


The Mathematical Model
Max 102000X1+40800X2+91250X3+182500X4+82000X5+164000X6
S.T.
800X1 + 500X2+ 1500X3+ 4000X4+ 2000X5 + 6000X6
X1 +
X2
X1 +
X2
X3 +
X4
X3 +
X4
X5 +
X6
X1 +
X3 +
X4 +
X5 +
X6
X4 +
X6 8
800X1 + 500X2
1500X3 + 4000X4
2000X5 + 6000X6
All variables non-negative

90000 Budget
# of Building
65
Today ads
20
# of Lumber
13
Weekly ads
4
3 Timber World ads
Full Page
50
Colored

40000

40000
Maximum
40000 spent
In each magazine

55

Vertex Software, Inc.


VERTEX SOFTWARE, INC.

Totals
Cost
Expsoure Units

Publication

Page Size

Style

Cost Per Ad Exposure Units

Ads

Building Today

Full
Half

B&W
B&W

$800
102000
$500
40800
Totals for Building Today

50
0
50

$40,000
$0
$40,000

5100000
0
5100000

Lumber Weekly

Full
Full

B&W
Color

$1,500
91250
$4,000
182500
Totals for Lumber Weekly

5
8
13

$7,500
$32,000
$39,500

456250
1460000
1916250

Timber World

Full
Full

B&W
Color

$2,000
82000
$6,000
164000
Totals for Timber World

2
1
3

$4,000
$6,000
$10,000

164000
164000
328000

TOTALS

66

$89,500

7344250

Size Totals

Full Page
Half Page

66
0

$89,500
$0

7344250
0

Style Totals

B&W
Color

57
9

$51,500
$38,000

5720250
1624000

LIMITS
Budget
Max Build Today
Min Build Today
Max Lum Week
Min Lum Week
# Timber World
Min Full Page
Min Color
Max Any Pub

$90,000
65
20
13
4
3
50
8
$40,000

56

Copyright 2002 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that named in
Section 117 of the United States Copyright Act without the
express written consent of the copyright owner is unlawful.
Requests for further information should be addressed to the
Permissions Department, John Wiley & Sons, Inc. Adopters of
the textbook are granted permission to make back-up copies for
their own use only, to make copies for distribution to students of
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best suit their instructional needs. Under no circumstances can
copies be made for resale. The Publisher assumes no
responsibility for errors, omissions, or damages, caused by the
use of these programs or from the use of the information
contained herein.

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