Sei sulla pagina 1di 119 LINEAR PROGRAMMING CASE STUDIES AND SOLUTIONS

Vassilis Kostoglou

E-mail: vkostogl@it.teithe.gr URL: www.it.teithe.gr/~vkostogl

1

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Case study 1

Portfolio selection Select a portfolio package from a set of alternative investments

Maximization of the expected return or minimization of the risk

Available capital

Company’s policy

Duration of investments’ economic life, potential growth rate, danger, liquidity

2

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Return data

Expected annual return of investments Investment Expected annual return rate (%) Share A – manufacturing sector 15.4 Share B - manufacturing sector 19.2 Share C - food and beverage sector 18.7 Share D – food and beverage sector 13.5 Mutual fund E 17.8 Mutual fund Z 16.3

3

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Requirements

Total amount = € 90000 Amount in shares of a sector no larger than 50% of total available

Amount in shares with the larger return of a sector less or equal to 80% of sector’s total amount

Amount in manufacturing company Β less or equal to 10% of the whole share amount

Amount in mutual funds less or equal to 25% of the amount in manufacturing shares

4

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution

Decision variables x 1 = invested amount in share A of the manufacturing sector x 2 = invested amount in share B of the manufacturing sector x 3 = invested amount in share C of the food and beverage sector x 4 = invested amount in share D of the food and beverage sector x 5 = invested amount in mutual fund E x 6 = invested amount in mutual fund Z

5

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Summary of the model Max z = 0.154x 1 + 0.192x 2 + 0.187x 3 + 0.135 x 4 + 0.178x 5 + 0.163x 6

with constraints:

 1 x 1 + 2 x 1 + 3 4 -0.8 x 1 + 5 6 -0.1 x 1 + 7 -0.25 x 1 -

and x i >= 0, i = 1, 2,…, 6

 x 2 + x 2 0.2 x 2 0.9 x 2 0.25 x 2 -

0.2

0.1

x 3

x

x

x

3

3

3

+

+

-

-

x 4

x

4

0.8 x 4 0.1 x 4

+

+

x 5

x

5

+

+

x 6

x

6

 <= 90 <= 45 <= 45 <= 0 <= 0 <= 0 <= 0

6

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Summary of results

Results of optimal solution Investment Amount invested Annual return rate expected (%) Total expected return of the investment (4) = (2) x (3) (1) (2) (3) Share A 27900 15.4 4296.6 Share B 8100 19.2 1555.2 Share C 36000 18.7 6732 Share D 9000 13.5 1215 Mutual fund E 9000 17.8 1602 Mutual fund Z 0 16.3 0 Total 90000 17.11 15400.8

7

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with QSB  8

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

QSB+

|---QSB+-------------- Solution Summary for case study 1–--------------------| |----------------------------------------------------------------------------|

Maximum |

| Solution | ty Cost |Obj. Coef.|Obj. Coef.|Obj. Coef.|

| Number

| Variable | Variable |

|Opportuni-| Minimum | Current |

|

Name |----------+----------+----------+----------+----------+----------+----------|

 | 1 | X1 | 27900 | 0 | -.070777 | .154 | .1764444| | 2 | X2 | 8100 | 0 | .154 | .192 | .394| | 3 | X3 | 36000 | 0 | .1638 | .187 | M| | 4 | X4 | 9000 | 0 | 0.042199 | .135 | .187| | 5 | X5 | 9000 | 0 | .163 | .178 | .2708001| | 6 | X6 | 0 | .015 | -M | .163 | .178|

|----------------------------------------------------------------------------|

|

|----------------------------------------------------------------------------| |----------------------------------------------------------------------------| |---------------- Constraint Summary for Ενότητα 3.2 ------------------------|

| Maximized OBJ = 15400.8 Iteration = 7 Elapsed CPU seconds = 0

|----------------------------------------------------------------------------|

 |Constraint|Constraint| Shadow | Surplus | Minimum | Current | Maximum | | Number | Status | Price | | R. H. S. | R. H. S. | R. H. S. |

|----------+----------+----------+----------+----------+----------+----------|

 | 1 |Tight (<)| .16184 | 0 | 53035.71 | 90000 | 101250 | | 2 |Loose (<)| 0 | 9000 | 36000 | 45000 | M | | 3 |Tight (<)| 0.018560 | 0 | 33750 | 45000 | 76363.63 | | 4 |Loose (<)| 0 | 20700 | -20700 | 0 | M | | 5 |Tight (<)| .052 | 0 | -36000 | 0 | 9000 | | 6 |Tight (<)| .038 | 0 | -8100 | 0 | 20700 | | 7 |Tight (<)| .01616 | 0 | -11250 | 0 | 36964.29 |

|----------------------------------------------------------------------------|

9

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with LINDO  10

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

LINDO results (1)

LP OPTIMUM FOUND AT STEP OBJECTIVE FUNCTION VALUE

6

1)

15400.80

VARIABLE

VALUE

REDUCED COST

 X1 27900.000000 0.000000 X2 8100.000000 0.000000 X3 36000.000000 0.000000 X4 9000.000000 0.000000 X5 9000.000000 0.000000 X6 0.000000 0.015000 ROW SLACK OR SURPLUS DUAL PRICES 1) 0.000000 0.161840 2) 9000.000000 0.000000 3) 0.000000 0.018560 4) 20700.000000 0.000000 5) 0.000000 0.052000 6) 0.000000 0.038000 7) 0.000000 0.016160

NO. ITERATIONS=

6 11

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

LINDO results (2)

RANGES IN WHICH THE BASIS IS UNCHANGED:

VARIABLE

CURRENT COEF

OBJ COEFFICIENT RANGES

ALLOWABLE INCREASE

ALLOWABLE DECREASE X1 0.154000 0.022444 0.224778 X2 0.192000 0.202000 0.038000 X3 0.187000 INFINITY 0.023200 X4 0.135000 0.052000 0.092800 X5 0.178000 0.092800 0.015000 X6 0.163000 0.015000 INFINITY ROW CURRENT RHS RIGHTHAND SIDE RANGES ALLOWABLE INCREASE ALLOWABLE DECREASE 1 90000.000000 11250.000000 36964.285156 2 45000.000000 INFINITY 9000.000000 3 45000.000000 31363.634766 11250.000000 4 0.000000 INFINITY 20700.000000 5 0.000000 9000.000000 36000.000000 6 0.000000 20700.000000 8100.000000 7 0.000000 36964.285156 11250.000000

12

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with Excel  13

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution window  14

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS  15

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Sensitivity analysis  16

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Case Study 2 Financial programming problem

Initial amount: € 80000

Timeframe of investments’ decisions: 4 months

Two-month government bonds: return 3%

Three-month government bills: return 6.5%

Bank deposits: interest 1%

At the beginning of the 5 th month at least € 40000 are needed

Maximum amount in two-month or three-month bonds: € 32000

17

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Decision variables Β j = amount to be invested in government bonds at the beginning of the month j C j = amount to be invested in government bills at the beginning of the month j D j = amount to be invested in bank deposits at the beginning of the month j

18

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Objective function (total return)

Max z

=

 0.03B 1 + 0.03B + 0.065C 1 + 0.065C + 0.01D 1 + 0.01C

Basic rule of capital flow:

2

2

2

+

+

+

0.03B

0.065C

0.01C

3

3

3

+

+

+ 0.03B

0.065C

0.01D

4

4

4

Invested amount (start t) + Cash available (start t) = Available amount (end t-1) + Cash available (end t-1)

19

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Mathematical model

 1 2 3 - 4 - 5 6 7 8 9 10 11 12 13

+

B 1 B 2 1.03B 1 + 1.03B 2 +

+

1.03B 3 +

B

B

B

B

1

1

2

3

C 1

C 1

C

C

1

2

+

+

+

+

+

+

+

+

-

+

-

1.065C 1 +

C

C

B

B

1

2

3

4

B

B 3

2

B 4

C 2

C

2

C

3

+

+

D

1.01D

C

1.065C

1.01D

C

C

1

1

3

1

4

3

4

+

-

+

B i , C i , D i >= 0, for i = 1, 2, 3, 4

D 1.01D 2 + C

2

4

-

D 3

1.01D

3

+

D 4 = 80000 = 0 = 0 = 0

>= 40000 <= 32000 <= 32000 <= 32000 <= 32000 <= 32000 <= 32000 <= 32000 <= 32000

20

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

An alternative objective function Maximization of final value:

(the intermediate returns are included after their reinvestment)

Max Z = 1.03B 3 + 1.03B 4 + 1.065C 2 + 1.065C 3 + 1.065C 4 + 1.01D 4

21

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Summarized results

Results of optimal solution Investment Amount invested Investment return Total return (4) = (2) x (3) (1) (2) (3) B 1 32000.000 0.03 960.000 B 3 19557.842 0.03 586.735 B 4 12442.157 0.03 373.265 C 1 32000.000 0.065 2080.000 C 4 32000.000 0.065 2080.000 D 1 16000.000 0.01 160.000 D 2 16160.000 0.01 161.600 D 3 29723.750 0.01 297.237 D 4 19658.834 0.01 196.588 Total 6895.425

22

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with QSB (1st)  23

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with QSB (2nd)  24

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with QSB (3rd alternative)  25

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

QSB+ (1-1) |------------------ Solution Summary for case study 2------------------------| |----------------------------------------------------------------------------|

Maximum |

| Number

|Opportuni-|

| Variable | Variable |

| Solution | ty Cost |Obj. Coef.|Obj. Coef.|Obj. Coef.|

|----------+----------+----------+----------+----------+----------+----------|

Minimum |

Current |

|

Name

 | 1 | Β1 | 32000 | 0 | 0.029899 | .03 | M| | 2 | Β2 | 0 | 0 | 0.019901 | .03 |0.03010097| | 3 | Β3 | 19557.84 | 0 | 0.019903 | .03 | .0401| | 4 | Β4 | 12442.16 | 0 | .0199 | .03 |0.07543910| | 5 | Γ1 | 32000 | 0 | 0.029606 | .065 | M| | 6 | Γ2 | 0 | 0.045348 | -M | .065 | .1103485| | 7 | Γ3 | 0 | 0.010200 | -M | .065 |0.07520001| | 8 | Γ4 | 32000 | 0 | 0.054799 | .065 | M| | 9 | Δ1 | 16000 | 0 | -M | .01 |0.01010097| | 10 | Δ2 | 16160 | 0 | -9.90E19 | .01 |0.02009801| | 11 | Δ3 | 29723.76 | 0 | 0.009900 | .01 |0.02009603| | 12 | Δ4 | 19658.84 | 0 | -.999996 | .01 | .0199|

|----------------------------------------------------------------------------|

| Maximized OBJ = 6895.425 Iteration = 13 Elapsed CPU seconds = .0546875 |

|----------------------------------------------------------------------------|

26

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

QSB+ (1-2) |---------------- Constraint Summary for case study 2 -----------------------| |----------------------------------------------------------------------------|

|Constraint|Constraint| Shadow | Surplus | Minimum |

|

|

|----------+----------+----------+----------+----------+----------+----------|

| 1

|

| 3

| 4

40000 | 52689.76 |

32000 |

|

|

|

|

32000 | 44564.12 |

| 9

32000 | 44565.35 |

| 5

19360.4 |

80000 | 99168.72 |

Current |

Maximum |

S.

Number

|

Status

|

Price

|

|

R. H. S. | R. H. S.

| R. H.

|Tight (=)| 0.050909 |

|Tight

(=)|

.040504 |

|Tight (=)| 0.030201 |

|Tight (=)| 0.020001 |

|Tight (>)| -0.00990 |

|Tight (<)| 0.000100 |

|Tight (<)| 0.010098 |

|Loose (<)|

|Tight (<)| 0.009998 |

0 | 67805.39 |

0 | -12316.5 | 0 | -12439.7 | 0 | -12564.1 | 0 | 20052.96 | 0 | 19559.06 |

32000 |

0

0 | 12442.16 | 19557.84 |

0 | 12250.46 |

2

0

|

0 | 19554.01 | 0 | 19749.54 |

6

7

8

32000 |

32000 |

|

M

 | 10 |Tight (<)| 0 | 0 | 32000 | 32000 | M | | 11 |Tight (<)| 0.035393 | 0 | 0 | 32000 | 32000 | | 12 |Tight (<)| 0 | 0 | 32000 | 32000 | M |

| 13

|----------------------------------------------------------------------------|

| Maximized OBJ = 6895.425 Iteration = 13 Elapsed CPU seconds = .0546875 | |----------------------------------------------------------------------------|

32000 | 44564.12 |

|Tight (<)| 0.044998 |

0 | 12250.46 |

27

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

QSB+ (2-1)

|--------------------- Solution Summary for case study 2---------------------| |----------------------------------------------------------------------------|

Maximum |

| Number

|Opportuni-|

| Variable | Variable |

| Solution | ty Cost |Obj. Coef.|Obj. Coef.|Obj. Coef.|

|----------+----------+----------+----------+----------+----------+----------|

Minimum |

Current |

|

Name | 1 | 2 | | Β1 Β2 | | 32000 | | 0 0 | -0.00010 | 0 | -0.01009 | 0 0 |0.00010097| M| | | 3 | Β3 | 19557.84 | 0 | 1.019904 | 1.03 | 1.0401| | 4 | Β4 | 12442.16 | 0 | 1.0199 | 1.03 | 1.075439| | 5 | Γ1 | 32000 | 0 | -0.03539 | 0 | M| | 6 | Γ2 | | 0 | 0.045348 | -M | 1.065 | 1.110349| | 7 | Γ3 0 | 0.010200 | -M | 1.065 | 1.0752| | 8 | Γ4 | 32000 | 0 | 1.0548 | 1.065 | M| | 9 | Δ1 | 16000 | 0 | -M | 0 |0.00010097| | 10 | Δ2 | 16160 | 0 | -9.90E19 | 0 |0.01009800| | 11 | Δ3 | 29723.76 | 0 | -0.00009 | 0 |0.01009602| | 12 | Δ4 | 19658.84 | 0 | 0.000001 | 1.01 | 1.0199|

|----------------------------------------------------------------------------|

| Maximized OBJ = 86895.42 Iteration = 13 Elapsed CPU seconds = 0.058593 |

|----------------------------------------------------------------------------|

|----------------------------------------------------------------------------|

28

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Alternative objective function QSB+ (2-2) |-------------------- Constraint Summary for case study 2--------------------|

|----------------------------------------------------------------------------|

 |Constraint|Constraint| Shadow | Surplus | Minimum | Current | Maximum | | Number | Status | Price | | R. H. S. | R. H. S. | R. H. S. |

|----------+----------+----------+----------+----------+----------+----------|

80000 | 99168.72 |

| 1

|Tight (=)| 1.050909 |

0 | 67805.39 |

 | 2 |Tight (=)| 1.040504 | 0 | -12316.5 | 0 | 19360.4 | | 3 |Tight (=)| 1.030202 | 0 | -12439.7 | 0 | 19554.01 | | 4 |Tight (=)| 1.020002 | 0 | -12564.1 | 0 | 19749.54 | | 5 |Tight (>)| -0.00990 | 0 | 20052.96 | 40000 | 52689.76 | | 6 |Tight (<)| 0.000100 | 0 | 19559.06 | 32000 | 32000 |

|

|

| 9

8

7

|Tight (<)| 0.010098 |

|Loose (<)|

|Tight (<)| 0.009998 |

32000 |

0 | 12442.16 | 19557.84 |

0 | 12250.46 |

0

|

32000 | 44565.35 |

|

32000 | 44564.12 |

32000 |

M

 | 10 |Tight (<)| 0 | 0 | 32000 | 32000 | M | | 11 |Tight (<)| 0.035393 | 0 | 0 | 32000 | 32000 | | 12 |Tight (<)| 0 | 0 | 32000 | 32000 | M |

32000 | 44564.12 |

|----------------------------------------------------------------------------|

| 13

|Tight (<)| 0.044998 |

0 | 12250.46 |

| Maximized OBJ = 86895.42 Iteration = 13 Elapsed CPU seconds = 0.058593 |

|----------------------------------------------------------------------------|

|----------------------------------------------------------------------------|

29

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with Excel  30

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution window  31

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS  32

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Sensitivity analysis  33

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Case Study 3 Investment choice problem in a limited capitals status

There are five independent investments

Maximization of the total present net value

Satisfaction of budget limitations

Cash inflows of the investments

Cash outflows of the investments

Each investment is divisible (investment rate)

34

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Inflow data

Cash inflows Year Investment 1 2 3 4 5 1 38 11 17 8 25 2 41 16 24 11 28 3 54 15 29 13 35 4 - 20 - 19 46

35

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Outflow data

Cash outflows Year Investment Amount 1 2 3 4 5 Available 0 34 10 16 9 31 55 1 13 5 8 4 10 28 2 14 6 10 6 13 30 3 17 6 11 7 12 37 4 - 8 - 5 16 30

36

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Table of cash flows

Cash flows of the problem Year Investment 10% discount rate of the interest 1 2 3 4 5 0 -34 -10 -16 -9 -31 1.000 1 25 6 9 4 15 0.909 2 27 10 14 5 15 30.826 3 37 9 18 6 23 0.751 4 - 12 - 14 30 0.683 NPV 38.14 18.67 17.26 12.83 32.79

Net Present Value 1 (NPV 1 ) = -34 *1 + 25 0.909 + 27 0.826 + 37 0.751 = 38.14

37

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS Decision variables – Objective function

x j = investment rate j (j = 1, 2, 3, 4, 5) which is accepted in the optimum solution

Max z = 38.14x 1 + 18.67x 2 + 17.26x 3 +12.83x 4 + 32.79x 5

38

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Constraints

 1 34x 1 + 10x 2 13x 1 + 5x 3 14x 1 + 6x 4 17 x 1 + 6x 5 8x 6 x 1 + 7 - x 8 9 10

2

2

2

2

2

2

+

+

+

+

x j >= 0, j = 1, 2, …5

16x

8x

10x

11x

3

3

3

3

x 3

+

+

+

+

+

31x

4x

6x

7x

5x

4

4

4

4

4

x 4

+

+

+

+

+

31x 5 <=

10x 5 <= 13x 5 <=

<=

16x 5 <= <= <=

12x

5

x 5

x 5

55

28

30

37

30

1

1

1

1

1 39

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Summarized results

Optimal solution results Variable Variable value NPV (*€ 1000) Total NPV (*€ 1000) (4) = (2) x (3) (1) (2) (3) x 1 1 38.14 38.14 x 2 1 18.67 18.67 x 3 0.125 17.26 2.1575 x 4 1 12.83 12.83 x 5 1 32.79 0 Total 71.7975

40

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with QSB  41

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

QSB+

|-QSB+------------ Solution Summary for case study 3 ------------------------|

Maximum |

| Number

|----------+----------+----------+----------+----------+----------+----------|

| Variable | Variable |

| Solution | ty Cost |Obj. Coef.|Obj. Coef.|Obj. Coef.|

|Opportuni-| Minimum | Current |

|

Name | 1 | X1 | 1 | 0 | 36.6775 | 38.14 | M| | 2 | X2 | 1 | 0 | 10.7875 | 18.67 | M| | 3 | X3 | .125 | 0 | 16.92387 | 17.26 | 17.94823| | 4 | X4 | 1 | 0 | 9.70875 | 12.83 | M| | 5 | X5 | 0 | .6512495 | -M | 32.79 | 33.44125|

|----------------------------------------------------------------------------|

|

|----------------------------------------------------------------------------| |----------------- Constraint Summary for Ενότητα 3.4 -----------------------| |----------------------------------------------------------------------------|

| Maximized OBJ = 71.7975 Iteration = 5 Elapsed CPU seconds = 0

 |Constraint|Constraint| Shadow | Surplus | Minimum | Current | Maximum | | Number | Status | Price | | R. H. S. | R. H. S. | R. H. S. |

|----------+----------+----------+----------+----------+----------+----------|

 | 1 |Tight (<)| 1.07875 | 0 | 53 | 55 | 59.4 | | 2 |Loose (<)| 0 | 5 | 23 | 28 | M | | 3 |Loose (<)| 0 | 2.75 | 27.25 | 30 | M | | 4 |Loose (<)| 0 | 5.625 | 31.375 | 37 | M | | 5 |Loose (<)| 0 | 17 | 13 | 30 | M |

| 6

|Tight (<)| 1.462499 |

0 | .6206896 |

1 | 1.058824 |

 | 7 |Tight (<)| 7.8825 | 0 | 0 | 1 | 1.2 | | 8 |Loose (<)| 0 | .875 | .125 | 1 | M | | 9 |Tight (<)| 3.12125 | 0 | 0 | 1 | 1.222222 | | 10 |Loose (<)| 0 | 1 | 0 | 1 | M |

42

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with Excel  43

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution window  44

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS  45

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Sensitivity analysis window  46

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Case study 4 Problem data

 Advertising media Cost of one view (in €) Units of expected audience rate of one view 1. Friday – day 400 5000 2. Saturday – day 450 5500 3. Sunday – day 450 5700 4. Friday – night 500 7500 5. Saturday – night 550 8200 6. Sunday - night 550 8400

47

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Other relevant data Goal: Determination of views / records in order to maximize the total audience rate

Total available amount: € 45000

Maximum amount for Friday: € 11000

Maximum amount for Saturday: € 14400

Total daily view number: at least 20

Total nightly view number: at least 50% of the total

Maximum view number: each day 12, each night 18

48

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Decision variables

Χ 1 = number of views on Friday (day) Χ 2 = number of views on Saturday (day) Χ 3 = number of views on Sunday (day) Χ 4 = number of views on Friday (night) Χ 5 = number of views on Saturday (night) Χ 6 = number of views on Sunday (night) 49

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Mathematical model Max z = 5000x 1 + 5500x 2 + 5700x 3 + 7500x 4 + 8200x 5 + 8400x 6

with constraints:

 1 400x 1 + 2 400x 1 3 4 x 1 + 5 -0.5x 1 - 6 x 1 7 8 9 10 11

450x 2 + 450x 3

450x

2

x 2

0.5x 2

x

2

+

-

x 3

0.5x 3

x

3

+

+

+

x j >= 0, j = 1, 2, …5

500x 4

500x

4

0.5x 4

x

4

+

+

+

550x 5

550x 5

0.5x 5

x

5

+

+

+

550x 6

0.5x 6

x

6

 <= 45000 <= 11000 <= 14400 >= 20 >= 0 <= 12 <= 12 <= 12 <= 18 <= 18 <= 18

50

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Results Variable Value (number of views) Units of view audience rate Total audience rate of views (4) = (2) x (3) (1) (2) (3) x 1 5 5000 25000 x 2 10 5500 55000 x 3 12 5700 68400 x 4 18 7500 135000 x 5 18 8200 147600 x 6 18 8400 151200 Total 582200

51

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

Solution with QSB  52

LINEAR PROGRAMMING – CASE STUDIES AND SOLUTIONS

QSB+

|-QSB+------------ Solution Summary for case study 4 ------------------------|

|----------------------------------------------------------------------------|

Maximum |