1.

Budgeting problem:
Decision variables
 1 if project i is selected
xi  
 0 otherwise
Objective function
Max: 151x1  197 x2  119 x3  70 x4  130 x5  253 x6  165 x7  300 x8
Constraints:
Year 1: 20 x1  100 x2  20 x3  30 x4  50 x5  40 x6  50 x7  80 x8  230
Year 2: 20 x1  10 x2  10 x3  30 x4  10 x5  20 x6  40 x7  30 x8  100
Year 3: 20 x1  0 x2  10 x3  30 x4  10 x5  20 x6  10 x7  20 x8  50
Year 4: 20 x1  0 x2  10 x3  20 x4  10 x5  20 x6  10 x7  0 x8  50
Year 5: 10 x1  30 x2  10 x3  10 x4  10 x5  20 x6  10 x7  0 x8  50
Projects 1, 2, and 3: x1  x2  x3  1
Projects 4, 5, and 6: x4  x5  x6  1
Projects 7 and 8: x8  x7
xi binary.
2. Fixed cost problem:
Decision variables
xi  Units of product i produced, i  1, 2,3
 1 product i is produced
yi   , i  1, 2,3
 0 otherwise
Objective function
Max 35 x1  50 x2  40 x3  (1000 y1  500 y2  1500 y3 )
Constraints:
Resource 1: 2 x1  3 x2  6 x3  500
Resource 2: 8 x1  2 x2  3 x3  400
Resource 3: 4 x1  7 x2  2 x3  300
If a product is not produced, xi must be zero:
4 x1  300 y1
7 x2  300 y2
2 x3  300 y3
(Note that here we use resource 3, we can actually use either of the three resources to
restrict production to be zero when it is decided not to produce a product).
3. Similar to the example discussed in Lecture 13.
Decision variables:
xij  Units of product shipped from plant i to warehouse j , i  1, 2,...,5; j  1, 2,..., 6
 1 plant i is open
yi  
 0 otherwise
Objective function
Min 306 y1  140 y2  200 y3  164 y4  88 y5  67 x11  16 x12  ...  12 x55  72 x56
Constraints:
6

Plant i: x
j
ij  K i yi , K i is the capacity at plant i, i = 1, 2, …, 5.

(or equivalently, we can write them one by one as follows:)

x11  x12  x13  x14  x15  x16  18 y1
x21  x22  x23  x24  x25  x26  24 y2
x31  x32  x33  x34  x35  x36  27 y3
x41  x42  x43  x44  x45  x46  22 y4
x51  x52  x53  x54  x55  x56  31 y5
5
Warehouse j: x
i 1
ij  D j , D j is the demand at warehouse j , j  1, 2,..., 6,

(or equivalently, we can write them one by one as follows:)

x11  x21  x31  x41  x51  10
x12  x22  x32  x42  x52  8
x13  x23  x33  x43  x53  12
x14  x24  x34  x44  x54  6
x15  x25  x35  x45  x55  7
x16  x26  x36  x46  x56  11
Nonegativity for xij , binary for yi