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Suncoast Office, A Goal Programming Problem, Solution, Analysis, Sensitivity Analysis, and Report

This document summarizes a goal programming problem for Suncoast Office Supply to optimize customer contacts over a 6-week period. The problem has constraints on hours worked, sales volume, and minimum numbers of previous and new customer contacts. The optimal solution is to contact 150 previous customers and 70 new customers, using all 80 hours of possible overtime and meeting the $30,000 sales goal. Sensitivity analysis shows the solution is most sensitive to changing the priority of the sales volume goal.

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618 views8 pages

Suncoast Office, A Goal Programming Problem, Solution, Analysis, Sensitivity Analysis, and Report

This document summarizes a goal programming problem for Suncoast Office Supply to optimize customer contacts over a 6-week period. The problem has constraints on hours worked, sales volume, and minimum numbers of previous and new customer contacts. The optimal solution is to contact 150 previous customers and 70 new customers, using all 80 hours of possible overtime and meeting the $30,000 sales goal. Sensitivity analysis shows the solution is most sensitive to changing the priority of the sales volume goal.

Uploaded by

Arka Chakraborty
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Suncoast Office, a Goal Programming Problem,

Solution, Analysis, Sensitivity Analysis, and Report


Source book: Anderson, Sweeney, Williams An Introduction to Management Science
Prepared by: Parisay with some changes
Problem Statement:
Management o Suncoast !ice Supplies establishes monthly goals, or "uotas, or the
types o customers contacted# $or the ne%t & weeks, Suncoast's customer contact strategy
calls or the sales orce, which consists o our salespeople, to make ()) contacts with
customers who ha*e pre*iously purchased supplies rom the irm# In addition, the
strategy calls or +() contacts o new customers# ,he purpose o this latter goal is to
ensure that the sales orce is continuing to in*estigate new sources o sales#
Making allowances or tra*el and waiting time, as well as or demonstration and direct
sales time, Suncoast has allocated ( hours o sales orce eort to each contact o a
pre*ious customer# -ew customer contacts tend to take longer and re"uire . hours per
contact# -ormally, each salesperson works &) hours per week, or +/) hours o*er the &0
week planning hori1on2 under a normal work schedule, the our salespeople will ha*e
&3+/)45/&) hours o sales orce time a*ailable or customer contacts#
Management is willing to use some o*ertime, i needed, but is also willing to accept a
solution that uses less than the scheduled /&) hours a*ailable# 6owe*er, management
wants o*ertime o at most &) hours and underutili1ation o the work orce limited to at
most .) hours o*er the &0week period# ,hus, rom an o*ertime perspecti*e,
management7s goal is to use no more than /&)8&)5/9) hours o sales orce time, and
rom a labor utili1ation perspecti*e, management7s goal is to use at least /&)0.)5/+)
hours o sales orce time#
In addition to the customer contact goals, Suncoast has established a goal regarding sales
*olume# :ased on past e%perience, Suncoast estimates that each pre*ious customer
contacted will generate ;(<) o sales and each new customer contacted will generate
;+(< o sales# Management would like to generate sales o at least ;=),))) or the ne%t
month#
>i*en Suncoast7s small sales orce and the short time rame in*ol*ed, management has
decided that the o*ertime goal and the labor utili1ation goal are both priority le*el +
goals# Management also concluded that the ;=),))) sales goal should be a priority le*el
( goal and that the two customer contact goals should be priority le*el . goals#
+
Problem Summary:
?ustomer Min number o
contacts re"uired
?ontact hr @
customer
Sales ; @
customer
Pre*ious ()) ( (<)
-ew +() . +(<
At most /9)
hours
At least ;=),)))
per month
At least /+) hours
Priority le*el + goals:
>oal +: Ao not use any more than /9) hours o sales orce time#
>oal (: Ao not use any less than /+) hours o sales orce time#
Priority le*el ( goal:
>oal .: >enerate sales re*enues o at least ;=),)))#
Priority le*el . goals:
>oal &: ?all on at least ()) pre*ious customers#
>oal <: ?all on at least +() new customers#
Formulation:
B+: the number o pre*ious customers contacted in &0weeks
B(: the number o new customers contacted in &0weeks
S,:

!*er time
Cnder utili1ation
Sales goal
Per*ious contacts
-ew contacts

!$:
!*er time and under utili1ation
Sales
-umber o contacts

(
4 3 4 3
4 3
4 3 4 3
< . & . .
. ( (
( + + + +

+
+ =
=
+ =
S P S P Z
S P Z
S P S P Z
Input to WinS! soft"are:
.
Output from WinS!:
&
Summary of solution:
B+ 5 (<), B( 5 /)
D+ 5 ), D( 5 ), D. 5 /)
Analysis of output:
B+ 5 (<) EEE It means that we will contact (<) pre*ious customers# ,hat is the
minimum o ()) pre*ious customers is ulilled and e%ceeded by <), which is
desirable# It results in S
0
& 5 )#
B( 5 /) EEE It means that we will contact /) new customers# ,hat is the
minimum o +() new customers is not ulilled and it is behind by /), which is
not desirable# It resulted in S
0
< 5 /)# :ecause o this *alue we ended up ha*ing
D. 5 /)#
D+ 5 ) EEE ,his is related to total time and indicates there is no undesirable
situation# Plug in the *alues o B+ and B( into the time constraint we will ha*e:
(B+ 8 .B( 5 (3(<)4 8 .3/)4 5 /9)# ,his results in using all &) hours o possible
o*ertime, which is no problem# As well as being abo*e under utili1ation, this is
no problem either#
D( 5 ) EEE ,his is related to total sales and indicates there is no undesirable
situation# Plug in the *alues o B+ and B( into sales constraint we will ha*e:
(<)B+ 8 +(<B( 5 (<)3(<)4 8 +(<3/)4 5 =))))#
Report
:ased on the gi*en inormation we need to contact (<) pre*ious customers and /) new
customers# It will result in total sales o ;=),)))# We need /9) hours o agents, this
mean we will use &) hours o o*ertime#
<
Sensitivity analysis
Input for reordered goals scenario #:
Partial output for reordered goals scenario #:
/
Input for reordered goals scenario $:
Partial output for reordered goals scenario $:
=
Sensitivity Analysis Summary for a Goal Programming Problem
3Aetails are in ile called Suncoast F%ample on >oal Programming Sensiti*ity Analysis
on ?lass -otes web page%4
# Priorities # # !ptimal Solution #
Second Ae*iation
6ighest 6ighest Gowest B+ B( D+ D( D. #
S#&, S$' S(' S)', S*' $*+ ,+ + + ,+
S(' S#&, S$' S)', S*' $*+ ,+ + + ,+
S)', S*' S#&, S$' S(' $++ #$+ + -+ *+++

Prepared: April ())<, updated September ())H
9

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