Professional Documents
Culture Documents
PROBLEM 1
Win Big Gambling Club promotes gambling junkets from a large Midwestern city to casinos in the
Bahamas. The club has budgeted up to $8,000 per week for local advertising. The money is to be allocated
among four promotional media: TV spots, newspaper ads, and two types of radio advertisements. Win Bigs
goal is to reach the largest possible high-potential audience through the various media. The following Table
presents the number of potential gamblers reached by making use of an advertisement in each of the four
media. It also provides the cost per advertisement placed and the maximum number of ads that can be
purchased per week.
Medium
Audience Reached
per Ad
5,000
TV spot (1 minute)
8,500
Daily newspaper (full-page ad)
Radio spot (30 seconds prime time) 2,400
2,800
Radio spot (1 minute afternoon)
Cost
per Ad ($)
800
925
290
380
Maximum Ads
per Week
12
5
25
20
Win Bigs contractual arrangements require that at least five radio spots be placed each week. To ensure a
broad-scoped promotional campaign, management also insists that no more than $1,800 be spent on radio
advertising every week. Determine the optimal mix of these advertising mediums using Linear
Programming.
PROBLEM 2
Management Sciences Associates (MSA) is marketing and computer research firm based in Washington,
DC, that handles consumer surveys. One of the clients is a national press service that periodically conducts
political polls on issues of widespread interest. In a survey for the press service, MSA determines that it
must fulfil several requirements in order to draw statistically valid conclusions on the sensitive issue of new
US immigration laws aimed at countering terrorism:
1.
2.
3.
4.
5.
Region
State bordering Mexico
State not bordering Mexico
PROBLEM 3
International City Trust (ICT) invests in trade credits, corporate bonds, precious metal stocks, mortgagebacked securities, and construction loans. ICT has $5 million available for immediate investment and
wishes to maximize the interest earned on its investments over the next year. The specifics of the investment
possibilities are shown in the following table. For each type of investment, the table shows the expected
return over the next year as well as a score that indicates the risk associated with the assessment. (A lower
score implies less risk).
To encourage a diversified portfolio, the board of directors has placed several limits on the amount that can
be committed to any one type of investment: (1) No more than 25% of the total amount invested may be in
any single type of investment, (2) at least 30% of the funds invested must be in precious metals, (3) at least
45% must be invested in trade credits and corporate bonds , and (4) the average risk score of the total
investment must be 2 or less.
INVESTMENT
Trade credits
Corporate bonds
Gold Stocks
Platinum, stocks
Mortgage securities
Construction loans
INTEREST EARNED
7%
10%
19%
12%
8%
14%
RISK SCORE
1.7
1.2
3.7
2.4
2.0
2.9
PROBLEM 4
Hong Kong Bank of Commerce and Industry is a busy bank that has requirements for between 10 and 18
tellers, depending on the time of day. The afternoon time, from noon to 3 P.M, is usually heaviest. The
following table indicates the workers needed at various hours that the bank is open.
TABLE: Tellers Required for Hong Kong Bank
TIME PERIOD
NUMBER
REQUIRED
9 A.M - 10 A.M 10
10 A.M - 11 A.M 12
11 A.M - Noon 14
16
Noon - 1 P.M
18
1 P.M - 2 P.M
17
2 P.M - 3 P.M
15
3 P.M - 4 P.M
10
4 P.M - 5 P.M
The bank now employs 12 full time tellers but also has several people available on its roster of
part-time employees. A part-time employee must put in exactly 4 hours per day but can start anytime
between 9 A.M and 1 P.M. Part-timers are a fairly inexpensive labor pool because no retirement or lunch
benefits are provided for them. Full-timers, on the other hand, work from 9 A.M and 5 P.M. but are allowed
1 hour for lunch.( Half of the full-timers eat at 11 A.M and the other half at noon.) Each full-timer thus
provides 35 hours per week of productive labor time.
The banks corporate policy limits part-time hours to a maximum of 50% of the days total
requirement. Part-timers earn $7 per hour (or $28 per day) on average, and full-timers earn $90 per day in
salary and benefits, on average. The bank would like to set a schedule that would minimize its total
personnel costs. It is willing to release one or more of its full-time tellers if it is cost-effective to do so.
PROBLEM 5
Vehicle loading problems involve deciding which items to load on a vehicle (e.g. truck, ship, aircraft) to
maximize the total value of the load shipped. The items loaded may need to satisfy several constraints, such
as weight and volume limits of the vehicle, minimum levels of certain items that may need to be accepted,
etc. As an example, we consider Goodman Shipping, an Orlando firm owned by Steven Goodman. One of
his trucks, with a weight capacity of 15,000 pounds and a volume capacity of 1,300 cubic feet, is about to
be loaded. Awaiting shipment are the items shown in Table 1. Each of these six items, we see, has an
associated total dollar value, available weight and volume per pound that the item occupies. The objective
is to maximize the total value of the items loaded onto the truck without exceeding the trucks weight and
volume capacities.
Table: Shipments for Goodman Shipping
ITEM VALUE
1
2
3
4
5
6
$15.500
$14,400
$10,350
$14,525
$13,000
$9,625
WEIGHT
VOLUME
(POUNDS )
(CU.FT.PER POUND)
5,000
4,500
3,000
3,500
4,000
3,500
0.125
0.064
0.144
0.448
0.048
0.018
PROBLEM 6
Greenberg Motors, Inc., manufactures two different electrical motors for sale under contract to Drexel
Corp., a well-known producer of small kitchen appliance. Its model GM3A is found in many Drexel food
processors, and its model GM3B is used in the assembly of blenders.
Three times each year, the procurement officer at Drexel contracts Irwin Greenberg, the founder of
Greenberg Motors, to place a monthly order for each of the coming four months. Drexels demand for
motors varies each month, based on its sales forecasts, production capacity, and financial position.
Greenberg has just received the January-April order and must begin his own four month production plan.
The demand for motors is shown in the following table.
APRIL
1,100
1,400