Indian Institute of Management Bangalore

Supply Chain Management

2018-19
Mini-Assignment 2
Submitted by:
Kundan Thakan
1811060

1. Solve the following linear program using Excel solver:

Max 2x+3y

Subject to

x+ y ≤ 5
x+2y ≤ 7

x ≥ 0, y integer.

Submit the Excel file with the solution. Do make sure that Solver boxes are complete.

Solution:

X=3
Y=2

Objective function value = 12

2. [Optional] Exercise 3, PP 156, textbook. For simplicity, consider production only in US

and Germany. Also, consider only the North American and Europe markets.

Solution:

North America Europe

United States $600 $1300
Germany $1300 $600
a)

‘Variables:

1
 A = quantity to be produced in United States plant to be supplied to North America
B = quantity to be produced in United States plant to be supplied to Europe
C = quantity to be produced in Germany plant to be supplied to North America
D = quantity to be produced in Germany plant to be supplied to Europe

Objective function:
Min 600A + 1300B + 1300C + 600D + 10000A + 10000B + 7530C + 7530 D

Constraints:

A+B >= 92.5

C+D >= 237.5
A+C <= 270
B+D <= 200
A+B <= 185
C+D <= 475

On solving using excel solver, we get the following answer:

A 0
B 185
C 270
D 15

The value of the objective function is : $ 4,596,550

b)

If we remove the limits on the production in the plant, we get the following linear
programming equation:

‘Variables:

A = quantity to be produced in United States plant to be supplied to North America

B = quantity to be produced in United States plant to be supplied to Europe
C = quantity to be produced in Germany plant to be supplied to North America
D = quantity to be produced in Germany plant to be supplied to Europe

Objective function:
Min 600A + 1300B + 1300C + 600D + 10000A + 10000B + 7530C + 7530 D

Constraints:

2
 A+B >= 92.5
C+D >= 237.5
A+B <= 185
C+D <= 475

On solving using excel solver, we get the following answer:

A 32.5
B 0.0
C 237.5
D 0.0

The value of the objective function is : $ 2,441,624.98

c)

Scenario 1:

On adding 10 ton capacity to United States plant, we get the following solution:

A 0
B 195
C 270
D 5.0

The value of the objective function is : $ 4,628,250

The cost has increased in this case.

Scenario 2:

Adding 10 ton capacity to Germany plant, we get the following solution:

A 0
B 185
C 270
D 15.0
The value of the objective function is : $,4596,550

In this case, the cost is same as the scenario where no capacity was increased.

3
 d)

Sunchem can introduce the exchange rates as a part of the constraint itself with equality to
ensure that changes are recorded, and the cost is minimized.