Operations ManagementHomework 3

Due on Wednesday, March 13, 2013 3.1 (30 points) Adirondack Paper Mills, Inc. operates paper plants in Augusta, Maine, and Tupper Lake, New York. Warehouse facilities are located in Albany, New York, and Portsmouth, New Hampshire. Distributors are located in Boston, New York, and Philadelphia. The Augusta plant has a capacity of 300 units, and the Tupper Lake plant has a capacity of 100 units. Boston has a demand of 150 units, New York has a demand of 100 units, and Philadelphia has a demand of 150 units. The unit transportation costs (in dollars) for shipments from the two plants to the two warehouses are presented in Table 1 and those from the two warehouses to the three distributors are presented in Table 2.

Table 1: Plant-to-warehouse Information Plant/Warehouse Albany Portsmouth Augusta 7 5 Tupper Lake 3 4

Table 2: Warehouse-to-distributor Information Warehouse/Distributor Boston New York Philadelphia Albany 8 5 7 Portsmouth 5 6 10

a. Draw the network representation of the Adirondack Paper Mills problem. b. Formulate the Adirondack Paper Mills problem as a linear program. c. Using spreadsheet tools, solve the linear program to determine the minimum cost shipping schedule for the problem. 3.2 (30 points) Sunco Oil has reneries in Los Angeles and Chicago. The Los Angeles renery can rene up to two million barrels of oil per year, and the Chicago renery 1

up to three million. Once rened, oil is shipped to two distribution points, Houston and New York City. Sunco estimates that each distribution point can sell up to ve million barrels per year. Because of dierences in shipping and rening costs, the prot earned (in dollars) per million barrels of oil shipped depends on where the oil was rened and on the point of distribution. This information is listed in Table 3

Table 3: Renery-to-point Information Renery/Distribution Point Houston New York Los Angeles $20,000 $15,000 Chicago $18,000 $17,000

Sunco is considering expanding the capacity of each renery. Each million barrels of annual rening capacity that is added will cost $120,000 for the Los Angeles renery and $150,000 for the Chicago renery. (a) Formulate the problem of determining how Sunco can maximize its prot (including expansion costs) over a ten-year period. (b) Use Solver to give an optimal solution. 3.3 (20 points) The activities, their predecessors, and durations of organizing a rock concert are listed in Table 4. (a) Draw the project network. (b) Use LP to nd the minimum number of days needed to prepare for the concert. 3.4 (20 points) A company is taking bids on four construction jobs. Three contractors have placed bids on the jobs. Their bids (in thousands of dollars) are given in Table 5 Contractor 1 can do only one job, but contractors 2 and 3 can each do up to two jobs. Formulation the problem to determine the minimum cost assignment of contractors to jobs, and then solve it in Excel.

Activity A B C D E F G H I J

Table 4: Rock Concert Activities Description Predecessors Duration Find Site 3.0 Find Engineers A 2.0 Hire Opening Act A 6.0 Set Radio and TV Ads C 2.0 Set up Ticket Agents A 3.0 Prepare Electronics B 3.0 Print Advertising C 5.0 Set up Transportation C 1.0 Rehearsals F, H 1.5 Last-minute Details I 2.0

Table 5: Bids Job 1 Contractor 1 50 Contractor 2 51 Contractor 3 -

for Contractors Job 2 Job 3 46 42 48 44 47 45

Job 4 40 45