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CPU

Worksheet

Analytical Modeling for Decision making

1. Sony, a television company, has three major departments for the manufacture of its two
models, A and B. The monthly capacities are given as follows:

Per Unit Time Requirement (hours)


Model A Model B Hours Available this
Month
Department I 4.0 2.0 1,600
Department II 2.5 1.0 1,200
Department III 4.5 1.5 1,600

The marginal profit per unit from model A is Birr 400 and that of model B is Birr 100.
Assuming that the company can sell any quantity of either product due to favorable market
conditions, determine the optimum output for both the models, the highest possible profit for
this month and the slack time in the three departments
Required
a) Formulate the problem as LPM
b) Solve the LPM using graphical method.
2. JOY leather, a manufacturer of leather Products, makes three types of belts A, B and C
which is processed on three machines M1, M2 and M3. Belt A requires 2 hours on machine
(M1) and 3 hours on machine (M 2) and 2 hours on machine (M 3). Belt B requires 3 hours on
machine (M1), 2 hours on machine (M2) and 2 hour on machine (M 3) and Belt C requires 5
hours on machine (M2) and 4 hours on machine (M3). There are 8 hours of time per day
available on machine M1, 10 hours of time per day available on machine M2 and 15 hours
of time per day available on machine M3. The profit gained from belt A is birr 3.00 per unit,
from Belt B is birr 5.00 per unit, from belt C is birr 4.00 per unit. What should be the daily
production of each type of belt so that the profit is maximum?
a) Formulate the problem as LPM
b) Solve the LPM using simplex algorithm.
c) Determine the range of feasibility, optimality and insignificance
d) Interpret the shadow prices
3. A manufacturing firm has discontinued production of a certain unprofitable product line.
This has created considerable excess production capacity. Management is considering to
devote this excess capacity to one or more of three products: product 1, 2 and 3. The
available capacity on the machines which might limit output is summarized in the
following table:
Machine Type Available Time
(in Machine- hours per Week)
Milling Machine 250
Lather 150
Grinder 50

The number of machine-hour required for each unit of the respective product is as follows

Machine Type Productivity in Machine-hours per Unit)


Product 1 Product 2 Product 3
Milling Machine 8 2 3
Lathe 4 3 0
Grinder 2 - 1

The profit per unit would be Birr 20, Birr 6, and Birr 8 respectively for product 1, 2 and 3. Find
how much of each product the firm should produce in order to maximize profit.
a) Formulate the problem as LPM
b) Solve the LPM using simplex algorithm.
c) Determine the range of feasibility, optimality and insignificance
d) Interpret the shadow prices
4. Determine an initial basic feasible solution to the following transportation problem by
using (a) the least cost method, and (b) Vogel’s approximation method. Based the initial
basic feasible solution that is relatively small conduct a modified distribution method to
determine the optimum solution to the problem.

Source Destinations Supply


D1 D2 D3 D4
S1 1 2 1 4 30
S2 3 3 2 1 50
S3 4 2 5 9 20
Demand 20 40 30 10

5. Determine an initial basic feasible solution to the following transportation problem by


using (a) NWCM, (b) LCM. And (c) VAM. (b) Based the NWCM solution, carryout a
stepping stone method of post optimality analysis to arrive at the optimum solution.
Source D1 D2 D3 D4 Supply
A 11 13 17 14 250
B 16 18 14 10 300
C 21 24 13 10 400
Demand 200 225 275 200

6. Using the following cost matrix, determine


(a) Optimal job assignment, and
(b) The cost of assignments.

Job
Machinist 1 2 3 4 5
A 10 3 3 2 8
B 9 7 8 2 7
C 7 5 6 2 4
D 3 5 8 2 4
E 9 10 9 6 10
7. A solicitor’s firm employs typists on hourly piece-rate basis for their daily work. There are
five typists and their charges and speed are different. According to an earlier understanding,
only one job is given to one typist and the typist is paid for a full hour even when s/he
works for a fraction of an hour. Find the least cost allocation for the following data:

Typist Rate/hour (Birr) Number of Pages Typed/hour Job No.of Pages


A 5 12 P 199
B 6 14 Q 175
C 3 8 R 145
D 4 10 S 298
E 4 11 T 178
Assume that the typist is to be paid @ birr 5 per hour, the elements of the cost matrix are
7
obtained as follows. To illustrate, if typist A is given job P, he would require 199/12 =16
12
hours and, hence, be paid for 17 hours. This results in a cost of Birr 85(17 X 5) for this
combination.

8. A farmer is attempting to decide which of three crops he should plant on his 100 acre farm.
The profit from each crop is strongly dependent on the rainfall during the growing season.
He has categorized the amount of the rainfall as substantial, moderate or light. He estimates
his profit for each crop as shown in the table below:

Rainfall Estimated Profit (Br)


Crop A Crop B Crop C
Substantial 7,000 2,500 4,000
Moderate 3,500 3,500 4,000
Light 1,000 4,000 3,000
Based on the weather in previous seasons and the current projection for the coming season, he
estimates the probability of substantial rainfall as 0.2, that of moderate rainfall as 0.3 and that of
light rainfall as 0.5.

Furthermore, services of forecasters could be employed to provide a detailed survey of current


rainfall prospects as shown in the table.

Rainfall Estimated Profit (Br)


Crop B Crop C
Substantial 0.70 0.25 0.05
Moderate 0.30 0.60 0.10
Light 0.10 0.20 0.70

(a) From the available data, determine the optimal decision as to which crop to plant under
condition of uncertainty
(b) From the available data, determine the optimal decision as to which crop to plant under
condition of risk EMV and EOL

9. Using the following cost matrix, determine


(a) Optimal job assignment, and
(b) The cost of assignments.

Job
Machinist 1 2 3 4 5
A 10 3 3 2 8
B 9 7 8 2 7
C 7 5 6 2 4
D 3 5 8 2 4
E 9 10 9 6 10

10. Considering data shown below, find the optimal value of X1 and X2 ( Use simplex
approach)

Min Z=5x1 +3x2


Subject to:
2x1+4x2 < 12
2x1+ 2x2 = 10
5x1+ 2x2 > 10
x1, x2 > 0

11. Consider the following Transportation problem and answer questions indicated below.
Destination

R S T SS
A 1 2 3 100
Origin

B 4 1 5 110
21
DD 80 120 60 0
260
A. Obtain the basic feasible solution using minimum cell cost method

B. Obtain the optimal solution

C. What is the optimal shipping cost?