George Johnson recently inherited a large sum of money; he wants to

use a portion of this money to set up a trust fund for his two children.
The trust fund has two investment options: (1) a bond fund and () a
stoc! fund. The pro"ected returns over the life of the investments are #$
for the bond fund and 1%$ for the stoc! fund. &hatever portion of the
inheritance he finally decides to commit to the trust fund' he wants to
invest at least (%$ of that amount in the bond fund. )n addition' he
wants to select a mi* that will enable him to obtain a total return of at
least +.,$.
a. -ormulate a linear programming model that can be used to
determine the percentage that should be allocated to each of the possible
investment alternatives.
b. .olve the problem using the graphical solution procedure.
The .ea &harf /estaurant would li!e to determine the best way to
allocate a monthly advertising budget of 01%%% between newspaper
advertising and radio advertising. 1anagement has decided that at least
,$ of the budget must be spent on each type of media' and that the
amount of money spent on local newspaper advertising must be at least
twice the amount spent on radio advertising. 2 mar!eting consultant has
developed an inde* that measures audience e*posure per dollar of
advertising on a scale from % to 1%%' with higher values implying greater
audience e*posure. )f the value of the inde* for local newspaper
advertising is ,% and the value of the inde* for spot radio advertising is
3%' how should the restaurant allocate its advertising budget in order to
ma*imi4e the value of total audience e*posure5
a. -ormulate a linear programming model that can be used to
determine how the restaurant should allocate its advertising budget in
order to ma*imi4e the value of total audience e*posure.
b. .olve the problem using the graphical solution procedure.
6onsider the following linear program:
a. .how the feasible region.
b. &hat are the e*treme points of the feasible region5
c. -ind the optimal solution using the graphical solution procedure.
Jac!son 7ole 1anufacturing is a small manufacturer of plastic products
used in the automotive and computer industries. 8ne of its ma"or
contracts is with a large computer company and involves the production
of plastic printer cases for the computer company9s portable printers. The
printer cases are produced on two in"ection molding machines. The 1:
1%% machine has a production capacity of , printer cases per hour' and
the 1:%% machine has a production capacity of ;% cases per hour. <oth
machines use the same chemical material to produce the printer cases;
the 1:1%% uses ;% pounds of the raw material per hour and the 1:%%
uses ,% pounds per hour. The computer company has as!ed Jac!son
7ole to produce as many of the cases during the upcoming wee! as
possible and has said that it will pay 013 for each case Jac!son 7ole can
deliver. 7owever' ne*t wee! is a regularly scheduled vacation period for
most of Jac!son 7ole9s production employees; during this time' annual
maintenance is performed for all e=uipment in the plant. <ecause of the
downtime for maintenance' the 1:1%% will be available for no more than
1, hours' and the 1:%% will be available for no more than 1% hours.
7owever' because of the high setup cost involved with both machines'
management has a re=uirement that' if production is scheduled on either
machine' the machine must be operated for at least , hours. The supplier
of the chemical material used in the production process has informed
Jac!son 7ole that a ma*imum of 1%%% pounds of the chemical material
will be available for ne*t wee!9s production; the cost for this raw
material is 0# per pound. )n addition to the raw material cost' Jac!son
7ole estimates that the hourly cost of operating the 1:1%% and the 1:
%% are 0,% and 0+,' respectively.
a. -ormulate a linear programming model that can be used to
ma*imi4e the contribution to profit.
b. -ind the optimal solution.
a. >elson .porting ?=uipment' )nc.' ma!es two different types of
baseball gloves: a regular model and a catcher9s model. The firm
has @%% hours of production time available in its cutting and
sewing department' (%% hours available in its finishing department'
and 1%% hours available in its pac!aging and shipping department.
The production time re=uirements and the profit contribution per
glove are given in the following table.
Aroduction Time (hours)
1odel 6utting and .ewing-inishing
Aac!aging and
.hipping
/egular
model
1 1B 1B3 0,
6atcher9s
model
(B 1B( 1B; 03
2ssuming that the company is interested in ma*imi4ing the total profit
contribution' answer the following:
a. &hat is the linear programming model for this problem5
b. -ind the optimal solution using the graphical solution procedure.
7ow many gloves of each model should >elson manufacture5
c. &hat is the total profit contribution >elson can earn with the above
production =uantities5
d. 7ow many hours of production time will be scheduled in each
department5
e. &hat is the slac! time in each department5
ArofitBGlove
1. The computerized solution of a given problem is given below:
Sensitivity Analysis: Objective function:
Variable Final
Value
Reduced
Cost
Objective
Coefficient
Allowable
Increase
Allowable
Decrease
M 25 0 90 1E+30 6
B 425 0 84 6 34
R 150 0 70 17 1E+30
D 0 -45 60 45 1E+30
Sensitivity Analysis: ight hand side:
!onstrain
ts
Final
Value
Shadow
Price
Constraint
R.H. Side
Allowable
Increase
Allowable
Decrease
1 5000 3 5000 850 50
2 1775 0 1800 1E+30 25
3 600 60 600 3.571428571 85
4 150 -17 150 50 150
Answer the followin !"estions#
$% &ho"l' ($n$er in)re$se the )$*$)it+ of reso"r)e 1 ,+ 100 "nits if
the )ost of s")h $ )h$ne is -.. 200/ 0h+ or wh+ not/
,% 0h$t will ,e the )h$ne in o,1e)ti2e 2$l"e if reso"r)e 1 is in)re$se'
,+ 1000 "nits/
)% 3f it )ost -.. 300 to in)re$se 1 "nit of reso"r)e 1 $n' -.. 5000 to
in)re$se 1 "nit of reso"r)e 34 whi)h reso"r)e will et the *riorit+4
)onsi'erin eno"h (one+ is $2$il$,le/ 0h+ or wh+ not/
'% -he 5ri)e of 1 "nit of *ro'")t D is -.. 60. 0h$t sho"l' the *ro'")t
sell for in or'er to ,e in)l"'e' in the sol"tion/
e% 0hi)h )onstr$ints $re f"ll+ "tili6e'/ 0h$t is the "tili6$tion 7in
*er)ent% of reso"r)e 2/
f% 0hether there will ,e $ )h$ne or not in the o*ti("( sol"tion4 if the
*ri)e of 1 "nit of *ro'")t M is -.. 80/ -.. 110/
"iven an #$ problem and its computerized solution:
%a& ' ( ).*+ ,1 - *..) ,/ - 0.1* ,)
Subject to2
1.+,1 - / ,/ - ,) 3( 4.11 !utting 5minutes6
7,1 - + ,/ - 11 ,)3( )0711 Sewing 5minutes6
,1 - 1.+ ,/ - ,)3( .111 $ac8ing 5minutes6
,/ 9( 1111 %ar8eting 5units6
,)9( )111 %ar8eting 5:nits6
This is a product mi& problem with: ,1 ( :nit of budget2 ,/ ((:nit of regular and ,)( :nit
of delu&e
Objective ;unction Sensitivity
Name Final
Value
Reduced
Cost
Objective
Coefcient
Allowable
Increase
Allowable
Decrease
&1 1 </.)+7 ).*+ /.)+7 1=-)1
&/ 1.01 1 *..) 1=-)1 /.47/+
&) )111 1 0.1* *.14 1=-)1
ight >and Side sensitivity
Cell
Name
Final
Value
Shadow
Price
Constraint
R.. Side
Allowable
Increase
Allowable
Decrease
!onstraint 1 .).1 1 4.11 1=-)1 )/71
!onstraint / )0711 1.+/. )0711 1.11 )711
!onstraint ) ++/1 1 .111 1=-)1 701
!onstraint 7 1.01 1 1111 .01 1=-)1
!onstraint + )111 <*.14 )111 )71 /71
Objective function value is in Ta8a. Answer the following ?uestions:
a6 Should management increase the capacity of sewing by 11 hours if the cost of such a
change is Ta8a 011@ Ahy or why not@
b6 The cost of ma8ing 1 unit of budget is Ta8a 11. Ahat should this product sell for in order
to be included in the solution@
c6 Ahat is the utilization 5in percent6 of the cutting department@
d6 Ahich constraints are not fully utilized@
e6 !an you have a production plan of product &/ only@
f6 Ahat will be the total proBt if we increase the right hand side value of the +
th
constraints
by ))1 units@ Cf we decrease the right hand side value of the +
th
constraints by /+1 units@
g6 Ahat will be the total proBt if we ma8e /441 units of delu&e 5instead of )1116 in the
optimal manner@
A company produces two products2 A and B. The unit revenues are D/ and D)2
respectively. Two raw materials2 M1 and M2, used in the manufacture of the two
products have respective daily availabilities of 0 and 10 units. One unit of A uses /
units of Ml and / units of M2, and 1 unit of Buses ) units of Ml and . units of M2.
5a6 Eetermine the dual prices of Ml and M2 and their feasibility ranges.
5b6 Suppose that 7 additional units of Ml can be ac?uired at the cost of )1
cents per unit. Aould you recommend the additional purchase@
5c6 Ahat is the most the company should pay per unit of M2?
5d6 Cf M2 availability is increased by + units2 determine the associated
optimum revenue.
5e6 Eetermine the optimality ranges for !A and !F2 assuming that the other
coeGcient is 8ept constant at its present value.
5f6 Cf the unit revenues !A and !F are changed simultaneously to D+ and D7
respectively2 determine the new optimum solution.
The Furroughs "arment !ompany manufactures menHs shirts and womenHs blouses
for Aalmar8 Eiscount Stores. Aalmar8 will accept all the production supplied by
Furroughs. The production process includes cutting2 sewing2 and pac8aging.
Furroughs employs /+ wor8ers in the cutting department2 )+ in the sewing
department2 and + in the pac8aging department. The factory wor8s one 0<hour shift2
+ days a wee8. The following table gives the time re?uirements and prices per unit
for the two garments:
%inutes per unit
:nit price 5D6
"arment !utting Sewing $ac8aging
Shirts /1 *1 1/ 0.11
Flouses .1 .1 7 1/.11
5a6 Eetermine the optimal wee8ly production schedule for Furroughs.
5b6 Eetermine the worth of one hour of cutting2 sewing2 and pac8aging in terms of
the total revenue.
5c6 Cf overtime can be used in cutting and sewing2 what is the ma&imum hourly rate
Furroughs should pay for overtime@
5d6 Suppose that / additional wor8ers of cutting department can be ac?uired at the
cost of D/01 each per wee8. Aould you recommend the additional wor8ers@
5e6 Eetermine the optimality ranges for price coeGcient of shirt and blouse2
assuming that the other coeGcient is 8ept constant at its present value.
The !ontinuing =ducation Eivision at the Ozar8 !ommunity !ollege oIers a total of
)1 courses each semester. The courses oIered are usually of two types: practical2
such as woodwor8ing2 word processing2 and car maintenanceJ and humanistic2 such
as history2 music2 and Bne arts. To satisfy the demands of the community2 at least
11 courses of each type must be oIered each semester. The division estimates that
the revenues of oIering practical and humanistic courses are appro&imately D1+11
and D1111 per course2 respectively.
5a6 Eevise an optimal course oIering for the college.
5b6 Show that the dual price of an additional course is D1+112 which is the same as
the revenue per practical course. Ahat does this result mean in terms of oIering
additional courses@
5c6 >ow many more courses can be oIered while guaranteeing that each will
contribute D1+11 to the total revenue@
5d6 Eetermine the change in revenue resulting from increasing the minimum
re?uirement of humanistic by one course.