Chapter 7Integer Linear Programming

MULTIPLE CHOICE 1. Which of the following is the most useful contribution of integer programming? a. finding whole number solutions where fractional solutions would not be appropriate b. using 0-1 variables for modeling flexibility c. increased ease of solution d. provision for solution procedures for transportation and assignment problems AN ! " #$ ! 1 $%#! &ntroduction

'. &n a model( x1 0 and integer( x' 0( and x) * 0( 1. Which solution would not be feasible? a. x1 * +( x' * )( x) * 0 b. x1 * ,( x' * .)-.( x) * 1 c. x1 * '( x' * )( x) * .+/d. x1 * 0( x' * -( x) * 0 AN ! 0 #$ ! 1 $%#! &ntroduction

). 1ounded solutions to linear programs must be evaluated for a. feasibility and optimality. b. sensitivity and duality. c. relaxation and boundedness. d. each of these choices are true. AN ! A #$ ! 1 $%#! 2# relaxation

,. 1ounding the solution of an 2# 1elaxation to the nearest integer values provides a. a feasible but not necessarily optimal integer solution. b. an integer solution that is optimal. c. an integer solution that might be neither feasible nor optimal. d. an infeasible solution. AN ! 0 #$ ! 1 $%#! 3raphical solution

+. $he solution to the 2# 1elaxation of a maximi4ation integer linear program provides a. an upper bound for the value of the ob5ective function. b. a lower bound for the value of the ob5ective function. c. an upper bound for the value of the decision variables d. a lower bound for the value of the decision variables AN ! A #$ ! 1 $%#! 3raphical solution

6. $he graph of a problem that re7uires x1 and x' to be integer has a feasible region a. the same as its 2# relaxation. b. of dots. c. of hori4ontal stripes. d. of vertical stripes. AN ! " #$ ! 1 $%#! 3raphical solution

/. $he 0-1 variables in the fixed cost models correspond to a. a process for which a fixed cost occurs.

b. the number of products produced. c. the number of units produced. d. the actual value of the fixed cost. AN ! A -. #$ ! 1 $%#! 8ixed costs

ensitivity analysis for integer linear programming a. can be provided only by computer. b. has precisely the same interpretation as that from linear programming. c. does not have the same interpretation and should be disregarded. d. is most useful for 0 - 1 models. AN ! 0 #$ ! 1 $%#! ensitivity analysis

.. 2et x1 and x' be 0 - 1 variables whose values indicate whether pro5ects 1 and ' are not done or are done. Which answer below indicates that pro5ect ' can be done only if pro5ect 1 is done? a. x1 9 x' * 1 b. x1 9 x' * ' c. x1 x' 0 d. x1 x' 0 AN ! : #$ ! 1 $%#! 0onditional and core7uisite constraints

10. 2et x1 ( x' ( and x) be 0 - 1 variables whose values indicate whether the pro5ects are not done ;0< or are done ;1<. Which answer below indicates that at least two of the pro5ects must be done? a. x1 9 x' 9 x) ' b. x1 9 x' 9 x) ' c. x1 9 x' 9 x) * ' d. x1 x' * 0 AN ! A #$ ! 1 $%#! = out of n alternatives constraint

11. &f the acceptance of pro5ect A is conditional on the acceptance of pro5ect "( and vice versa( the appropriate constraint to use is a a. multiple-choice constraint. b. = out of n alternatives constraint. c. mutually exclusive constraint. d. core7uisite constraint. AN ! : #$ ! 1 $%#! >odeling flexibility provided by 0-1 integer variables 1'. &n an all-integer linear program( a. all ob5ective function coefficients must be integer. b. all right-hand side values must be integer. c. all variables must be integer. d. all ob5ective function coefficients and right-hand side values must be integer. AN ! 0 #$ ! 1 $%#! $ypes of integer linear programming models

1). $o perform sensitivity analysis involving an integer linear program( it is recommended to a. use the dual prices very cautiously. b. ma=e multiple computer runs. c. use the same approach as you would for a linear program. d. use 2# relaxation.

AN ! "

#$ ! 1

$%#! A cautionary note about sensitivity analysis

1,. >odeling a fixed cost problem as an integer linear program re7uires a. adding the fixed costs to the corresponding variable costs in the ob5ective function. b. using 0-1 variables. c. using multiple-choice constraints. d. using 2# relaxation. AN ! " #$ ! 1 $%#! Applications involving 0-1 variables

1+. >ost practical applications of integer linear programming involve a. only 0-1 integer variables and not ordinary integer variables. b. mostly ordinary integer variables and a small number of 0-1 integer variables. c. only ordinary integer variables. d. a near e7ual number of ordinary integer variables and 0-1 integer variables. AN ! A TRUE/FALSE 1. $he 2# 1elaxation contains the ob5ective function and constraints of the &# problem( but drops all integer restrictions. AN ! $ #$ ! 1 $%#! 2# relaxation #$ ! 1 $%#! Applications involving 0-1 variables

'. &n general( rounding large values of decision variables to the nearest integer value causes fewer problems than rounding small values. AN ! $ #$ ! 1 $%#! 2# relaxation

). $he solution to the 2# 1elaxation of a minimi4ation problem will always be less than or e7ual to the value of the integer program minimi4ation problem. AN ! 8 #$ ! 1 $%#! 3raphical solution

,. &f the optimal solution to the 2# relaxation problem is integer( it is the optimal solution to the integer linear program. AN ! $ +. #$ ! 1 $%#! 2# relaxation

lac= and surplus variables are not useful in integer linear programs. AN ! 8 #$ ! 1 $%#! 0apital budgeting

6. A multiple choice constraint involves selecting = out of n alternatives( where = '. AN ! 8 #$ ! 1 $%#! >ultiple choice constraint

/. &n a model involving fixed costs( the 0 - 1 variable guarantees that the capacity is not available unless the cost has been incurred. AN ! $ #$ ! 1 $%#! 8ixed costs

-. &f x1 9 x' +00y1 and y1 is 0 - 1( then if y1 is 0( x1 and x' will be 0. AN ! $ #$ ! 1 $%#! :istribution system design

.. $he constraint x1 9 x' 9 x) 9 x, ' means that two out of the first four pro5ects must be selected. AN ! 8 #$ ! 1 $%#! = out of n alternatives constraint

10. $he constraint x1 x' * 0 implies that if pro5ect 1 is selected( pro5ect ' cannot be. AN ! 8 #$ ! 1 $%#! 0onditional and core7uisite constraints

11. $he product design and mar=et share optimi4ation problem presented in the textboo= is formulated as a 0-1 integer linear programming model. AN ! $ #$ ! 1 $%#! #roduct design and mar=et share optimi4ation problem 1'. $he ob5ective of the product design and mar=et share optimi4ation problem presented in the textboo= is to choose the levels of each product attribute that will maximi4e the number of sampled customers preferring the brand in 7uestion. AN ! $ #$ ! 1 $%#! #roduct design and mar=et share optimi4ation problem 1). &f a problem has only less-than-or-e7ual-to constraints with positive coefficients for the variables( rounding down will always provide a feasible integer solution. AN ! $ #$ ! 1 $%#! 1ounding to obtain an integer solution

1,. :ual prices cannot be used for integer programming sensitivity analysis because they are designed for linear programs. AN ! $ 1+. #$ ! 1 $%#! A cautionary note about sensitivity analysis

ome linear programming problems have a special structure that guarantees the variables will have integer values. AN ! $ #$ ! 1 $%#! &ntroduction to integer linear programming

16. 3enerally( the optimal solution to an integer linear program is less sensitive to the constraint coefficients than is a linear program. AN ! 8 #$ ! 1 $%#! A cautionary note about sensitivity analysis

1/. $he classic assignment problem can be modeled as a 0-1 integer program. AN ! $ #$ ! 1 $%#! Applications involving 0-1 variables

1-. &f #ro5ect + must be completed before #ro5ect 6( the constraint would be x + x6 0. AN ! 8 #$ ! 1 $%#! 0onditional and core7uisite constraints

1.. &f the 2# relaxation of an integer program has a feasible solution( then the integer program has a feasible solution. AN ! 8 #$ ! 1 $%#! 1ounding to obtain an integer solution

'0. >ultiple choice constraints involve binary variables. AN ! $ SHORT A S!ER 1. $he use of integer variables creates additional restrictions but provides additional flexibility. ?xplain. AN ! Answer not provided. #$ ! 1 $%#! &ntroduction #$ ! 1 $%#! >ultiple choice and mutually exclusive constraints

'. Why are 0 - 1 variables sometimes called logical variables? AN ! Answer not provided. #$ ! 1 $%#! &ntroduction

). 3ive a verbal interpretation of each of these constraints in the context of a capital budgeting problem. a. x1 x' 0 b. x1 x' * 0 c. x1 9 x' 9 x) ' AN ! Answer not provided. #$ ! 1 $%#! 0apital budgeting

,. ?xplain how integer and 0-1 variables can be used in an ob5ective function to minimi4e the sum of fixed and variable costs for production on two machines. AN ! Answer not provided. #$ ! 1 $%#! :istribution system design

+. ?xplain how integer and 0-1 variables can be used in a constraint to enable production. AN ! Answer not provided. #$ ! 1 PRO"LEM $%#! :istribution system design

1.

olve the following problem graphically. >ax s.t. +@ 9 6A 1/@ 9 -A 1)6 )@ 9 ,A )6 @( A 0 and integer 3raph the constraints for this problem. &ndicate all feasible solutions. 8ind the optimal solution to the 2# 1elaxation. 1ound down to find a feasible integer solution. &s this solution optimal? 8ind the optimal solution.

a. b. c.

AN ! a. $he feasible region is those integer values in the space labeled feasible region.

b. c.

%ptimal 2# relaxed occurs at @ * +.-1-( A * ,.6)6( with B * +6..0.. 1ounded down solution occurs at @ * +( A * ,( B* ,.. %ptimal solution is at @ * ,( A * 6( and B * +6. $%#! 3raphical solution

#$ ! 1 '.

olve the following problem graphically. >ax s.t. @ 9 'A 6@ 9 -A ,/@ 9 +A )+ @( A 0 A integer 3raph the constraints for this problem. &ndicate all feasible solutions. 8ind the optimal solution to the 2# 1elaxation. 1ound down to find a feasible integer solution. &s this solution optimal? 8ind the optimal solution.

a. b. c.

AN ! a. $he feasible region consists of the portions of the hori4ontal lines that lie within the area labeled 8. 1.

b. c.

$he optimal relaxed solution is at @ * 1.+)-( A * ,.-,6 where B * 11.')1. $he rounded solution is @ * 1.+)-( A * ,. $he optimal solution is at @ * '.66/( A * ,( B * 10.66/. $%#! 3raphical solution

#$ ! 1 ).

olve the following problem graphically. >in s.t. 6@ 9 11A .@ 9 )A '/ /@ 9 6A ,' ,@ 9 -A )' @( A 0 and integer 3raph the constraints for this problem. &ndicate all feasible solutions. 8ind the optimal solution to the 2# 1elaxation. 1ound up to find a feasible integer solution. &s this solution optimal? 8ind the optimal solution.

a. b. c.

AN ! a. $he feasible region is the set of integer points in the area labeled feasible region.

b. c.

$he optimal relaxed solution is at @ * ,.+( A * 1./+( and B * ,6.'+. $he rounded solution is @ * +( A * '. $he optimal solution is at @ * 6( A * 1( and B * ,/. $%#! 3raphical solution

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,. 0onsider a capital budgeting example with five pro5ects from which to select. 2et x i * 1 if pro5ect i is selected( 0 if not( for i * 1(...(+. Write the appropriate constraint;s< for each condition. 0onditions are independent. a. 0hoose no fewer than three pro5ects. b. &f pro5ect ) is chosen( pro5ect , must be chosen. c. &f pro5ect 1 is chosen( pro5ect + must not be chosen. d. #ro5ects cost 100( '00( 1+0( /+( and )00 respectively. $he budget is ,+0. e. No more than two of pro5ects 1( '( and ) can be chosen. AN ! a. b. c. d. e. x1 9 x' 9 x) 9 x, 9 x+ ) x) x, 0 x1 9 x+ 1 100x1 9 '00x' 9 1+0x) 9 /+x, 9 )00x+ ,+0 x1 9 x' 9 x) ' $%#! 0apital budgeting

#$ ! 1

+. 3rush 0onsulting has five pro5ects to consider. ?ach will re7uire time in the next two 7uarters according to the table below. #ro5ect A " 0 : ? $ime in first 7uarter + ) / ' 1+ $ime in second 7uarter 1' + ) 1 1evenue 1'000 10000 1+000 +000 '0000

1evenue from each pro5ect is also shown. :evelop a model whose solution would maximi4e revenue( meet the time budget of '+ in the first 7uarter and '0 in the second 7uarter( and not do both pro5ects 0 and :. AN ! 2et A * 1 if pro5ect A is selected( 0 otherwiseC same for "( 0( :( and ? >ax s.t. 1'000A 9 10000" 9 1+0000 9 +000: 9 '0000? +A 9 )" 9 /0 9 ': 9 1+? '+ -A 9 1'" 9 +0 9 ): 9 1? '0 09:1 $%#! 0apital budgeting

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6. $he Westfall 0ompany has a contract to produce 10(000 garden hoses for a large discount chain. Westfall has four different machines that can produce this =ind of hose. "ecause these machines are from different manufacturers and use differing technologies( their specifications are not the same. >achine 1 ' ) , a. b. c. d. 8ixed 0ost to et Dp #roduction 1un /+0 +00 1000 )00 Eariable 0ost #er Fose 1.'+ 1.+0 1.00 '.00 0apacity 6000 /+00 ,000 +000

$his problem re7uires two different =inds of decision variables. 0learly define each =ind. $he company wants to minimi4e total cost. 3ive the ob5ective function. 3ive the constraints for the problem. Write a constraint to ensure that if machine , is used( machine 1 cannot be.

AN ! a. b. c. 2et #i * the number of hoses produced on machine i Di * 1 if machine i is used( * 0 otherwise >in /+0D1 9 +00D' 9 1000D) 9 )00D, 9 1.'+# 1 9 1.+#' 9 #) 9 '#, #1 6000D1 #' /+00D' #) ,000D) #, +000D, #1 9 #' 9 #) 9 #, 10000 D1 9 D, 1 $%#! 8ixed costs

c.

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/. Fansen 0ontrols has been awarded a contract for a large number of control panels. $o meet this demand( it will use its existing plants in an :iego and Fouston( and consider new plants in $ulsa( t. 2ouis( and #ortland. 8inished control panels are to be shipped to eattle( :enver( and Gansas 0ity. #ertinent information is given in the table. 0onstruction hipping 0ost to :estination! Gansas

ources an :iego Fouston $ulsa t. 2ouis #ortland

0ost ------)+0(000 '00(000 ,-0(000 :emand

eattle + 10 . 1' , )(000

:enver / , 6 10 -(000

0ity 6 ) ' 11 .(000

0apacity '(+00 '(+00 10(000 10(000 10(000

:evelop a model whose solution would reveal which plants to build and the optimal shipping schedule. AN ! 2et >in s.t. #i5 * the number of panels shipped from source i to destination 5 "i * 1 if plant i is built( * 0 otherwise ;i * )( ,( +< )+0000") 9 '00000", 9 ,-0000"+ 9 +#11 9 /#1' 9 -#1) 9 10#'1 9 -#'' 9 6#') 9 .#)1 9 ,#)' 9 )#)) 9 1'#,1 9 6#,' 9 '#,) 9 ,#+1 9 10#+' 9 11#+) #11 9 #1' 9 #1) '+00 #'1 9 #'' 9 #') '+00 #)1 9 #)' 9 #)) 10000") #,1 9 #,' 9 #,) 10000", #+1 9 #+' 9 #+) 10000"+ #11 9 #'1 9 #)1 9 #,1 9 #+1 * )000 #1' 9 #'' 9 #)' 9 #,' 9 #+' * -000 #1) 9 #') 9 #)) 9 #,) 9 #+) * .000 $%#! :istribution system design

#$ ! 1 -.

implon >anufacturing must decide on the processes to use to produce 16+0 units. &f machine 1 is used( its production will be between )00 and 1+00 units. >achine ' andHor machine ) can be used only if machine 1Is production is at least 1000 units. >achine , can be used with no restrictions. >achine 1 ' ) , 8ixed cost +00 -00 '00 +0 Eariable cost '.00 0.+0 ).00 +.00 >inimum #roduction )00 +00 100 any >aximum #roduction 1+00 1'00 -00 any

;F&N$! Dse an additional 0 - 1 variable to indicate when machines ' and ) can be used.< AN ! 2et Di * the number of units made by machine i i * 1 if machine i is used ;re7uiring a set-up<( * 0 otherwise G * 1 if machine 1 produces at least 1000 units( * 0 otherwise +00
1

>in s.t.

9 'D1 9 -00
1

'

9 +D' 9 '00

9 )D) 9 +0

9 +D,

D1 )00

D1 1+00 1 D1 1000G ' G ) G D' +00 ' D' 1'00 ' D) 100 ) D) -00 ) D, 16+0 , D1 9 D ' 9 D) 9 D, * 16+0 #$ ! 1 $%#! :istribution system design

.. Aour express pac=age courier company is drawing up new 4ones for the location of drop boxes for customers. $he city has been divided into the seven 4ones shown below. Aou have targeted six possible locations for drop boxes. $he list of which drop boxes could be reached easily from each 4one is listed below. Bone :owntown 8inancial :owntown 2egal 1etail outh 1etail ?ast >anufacturing North >anufacturing ?ast 0orporate West 0an "e erved "y 2ocations! 1( '( +( 6 '( ,( + 1( '( ,( 6 )( ,( + 1( '( + )( , 1( '( 6

2et xi * 1 if drop box location i is used( 0 otherwise. :evelop a model to provide the smallest number of locations yet ma=e sure that each 4one is covered by at least two boxes. AN ! >in s.t. xi x1 9 x' 9 x+ 9 x6 ' x' 9 x, 9 x+ ' x1 9 x' 9 x, 9 x6 ' x) 9 x, 9 x+ ' x1 9 x ' 9 x+ ' x) 9 x, ' x1 9 x' 9 x6 ' $%#! Applications of integer linear programming

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10. 0onsider the problem faced by a summer camp recreation director who is trying to choose activities for a rainy day. &nformation about possible choices is given in the table below. 0ategory Art Activity 1 - #ainting $ime ;minutes< )0 #opularity with 0ampers , #opularity with 0ounselors '

>usic ports 0omputer

' - :rawing ) - Nature craft , - 1hythm band + - 1elay races 6 - "as=etball / - &nternet - - 0reative writing . - 3ames

'0 )0 '0 ,+ 60 ,+ )0 ,0

+ ) + ' 1 1 , 1

' 1 + 1 ) 1 ) '

a. b.

3ive a general definition of the variables necessary in this problem so that each activity can be considered for inclusion in the dayIs schedule. $he popularity ratings are defined so that 1 is the most popular. &f the ob5ective is to =eep the campers happy( what should the ob5ective function be?

Write constraints for these restrictions! c. At most one art activity can be done. d. No more than two computer activities can be done. e. &f bas=etball is chosen( then the music must be chosen. f. At least 1'0 minutes of activities must be selected. g. No more than 16+ minutes of activities may be selected. h. $o =eep the staff happy( the counselor rating should be no higher than 10. AN ! a. b. c. d. e. f. g. h. 2et xi * 1 if activity i is chosen( 0 if not( for i * 1( ... ( . >ax ,x1 9 +x' 9 )x) 9 +x, 9 'x+ 9 1x6 9 1x/ 9 ,x- 9 1x. x1 9 x' 9 x) 1 x/ 9 x- 9 x. ' x6 x, )0x1 9 '0x' 9 )0x) 9 '0x, 9 ,+x+ 9 60x6 9 ,+x/ 9 )0x- 9 ,0x. 1'0 )0x1 9 '0x ' 9 )0x) 9 '0x, 9 ,+x+ 9 60x6 9 ,+x/ 9 )0x- 9 ,0x. 16+ 'x1 9 'x' 9 1x) 9 +x, 9 1x+ 9 )x6 9 1x/ 9 )x- 9 'x. 10 $%#! Applications of integer programming

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11. $ower ?ngineering 0orporation is considering underta=ing several proposed pro5ects for the next fiscal year. $he pro5ects( the number of engineers and the number of support personnel re7uired for each pro5ect( and the expected profits for each pro5ect are summari4ed in the following table! 1 '0 1+ 1.0 ' ++ ,+ 1.#ro5ect ) , ,/ )+0 ,0 '.0 1.+ + .0 /0 ).6 6 6) /0 '.'

?ngineers 1e7uired upport #ersonnel 1e7uired #rofit ;J1(000(000s<

8ormulate an integer program that maximi4es $owerIs profit sub5ect to the following management constraints! 1< Dse no more than 1/+ engineers '< Dse no more than 1+0 support personnel )< &f either pro5ect 6 or pro5ect , is done( both must be done ,< #ro5ect ' can be done only if pro5ect 1 is done +< &f pro5ect + is done( pro5ect ) must not be done and vice versa

6<

No more than three pro5ects are to be done.

AN ! >ax s.t. #1 9 1.-#' 9 '#) 9 1.+#, 9 ).6#+ 9 '.'#6 '0#1 9 ++#' 9 ,/# ) 9 )-#, 9 .0#+ 9 6)#6 1/+ 1+#1 9 ,+#' 9 +0#) 9 ,0#, 9 /0#+ 9 /0#6 1+0 #, #6 * 0 #1 #' 0 #) 9 #+ 1 #1 9 #' 9 #) 9 #, 9 #+ 9 #6 ) #i * 0 or 1 $%#! Applications of integer programming

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1'. 3iven the following all-integer linear program! >A@ s.t. )x1 9 'x' )x1 9 x' . x 1 9 )x ' / x1 9 x' 1 x1( x' 0 and integer olve the problem as a linear program ignoring the integer constraints. how that the optimal solution to the linear program gives fractional values for both x1 and x'. What is the solution obtained by rounding fractions greater than of e7ual to 1H' to the next larger number? how that this solution is not a feasible solution. What is the solution obtained by rounding down all fractions? &s it feasible? ?numerate all points in the linear programming feasible region in which both x1 and x' are integers( and show that the feasible solution obtained in ;c< is not optimal and that in fact the optimal integer is not obtained by any form of rounding.

a b. c. d.

AN ! a. b. c. d. 8rom the graph on the next page( the optimal solution to the linear program is x1 * '.+( x' * 1.+( z * 10.+. "y rounding the optimal solution of x1 * '.+( x' * 1.+ to x1 * )( x' * '( this point lies outside the feasible region. "y rounding the optimal solution down to x1 * '( x' * 1( we see that this solution indeed is an integer solution within the feasible region( and substituting in the ob5ective function( it gives z * -. $here are eight feasible integer solutions in the linear programming feasible region with z values as follows! 1. '. ). ,. +. x1 0 1 ' ) 0 x' 0 0 0 0 1 4 0 ) 6 . '

optimal

6. /. -.

1 ' 1

1 1 '

+ /

part ;c< solution

x1 * )( x' * 0 is the optimal solution. 1ounding the 2# solution ;x1 * '.+( x' * 1.+< would not have been optimal.

#$ ! 1

$%#! 1ounding to obtain an integer solution

1). $omIs $ailoring has five idle tailors and four custom garments to ma=e. $he estimated time ;in hours< it would ta=e each tailor to ma=e each garment is listed below. ;An I@I in the table indicates an unacceptable tailor-garment assignment.< 3arment Wedding gown 0lown costume AdmiralIs uniform "ullfighterIs outfit 1 1. 11 1' @ ' ') 1, '0 $ailor ) '0 @ 11 '0 , '1 1' @ 1+ 110 . '1

8ormulate and solve an integer program for determining the tailor-garment assignments that minimi4e the total estimated time spent ma=ing the four garments. No tailor is to be assigned more than one garment and each garment is to be wor=ed on by only one tailor. AN ! :efine the decision variables! xij * 1 if garment i is assigned to tailor jC * 0 otherwise. Number of decision variables * K;number of garments<;number of tailors<L ;number of unacceptable assignments< * K,;+<L ) * 1/. :efine the ob5ective function! >inimi4e total time spent ma=ing garments! >&N 1.x11 9 ')x1' 9 '0x1) 9 '1x1, 9 1-x1+ 9 11x'1 9 1,x'' 9 1'x', 9 10x'+ 9 1'x)1 9 -x)' 9 11x)) 9 .x)+ 9 '0x,' 9 '0x,) 9 1-x,, 9 '1x,+ :efine the constraints! ?xactly one tailor per garment! No more than one garment per tailor!

1< '< )< ,<

x11 9 x1' 9 x1) 9 x1, 9 x1+ * 1 x'1 9 x'' 9 x ', 9 x'+ * 1 x)1 9 x)' 9 x)) 9 x)+ * 1 x,' 9 x,) 9 x,, 9 x,+ * 1

+< 6< /< -< .<

x11 9 x'1 9 x)1 1 x1' 9 x'' 9 x)' 9 x,' 1 x1) 9 x)) 9 x,) 1 x1, 9 x', 9 x,, 1 x1+ 9 x'+ 9 x)+ 9 x,+ 1

Nonnegativity! xij 0 for i * 1(..(, and j * 1(..(+ %ptimal olution! Assign wedding gown to tailor + Assign clown costume to tailor 1 Assign admiral uniform to tailor ' Assign bullfighter outfit to tailor , $otal time spent * ++ hours #$ ! 1 $%#! Assignment problem

1,. >ar=et #ulse 1esearch has conducted a study for 2ucas 8urniture on some designs for a new commercial office des=. $hree attributes were found to be most influential in determining which des= is most desirable! number of file drawers( the presence or absence of pullout writing boards( and simulated wood or solid color finish. 2isted below are the part-worths for each level of each attribute provided by a sample of / potential 2ucas customers. 0onsumer 1 ' ) , + 6 / 8ile :rawers 0 1 ' + '6 '0 111 + , 16 '' 1' , 1. . ) 6 1+ '1 . 6 ) #ullout Writing "oards #resent Absent 111 1' 16 / 1) 1. , 1, 1/ 1) + 8inish imul. Wood olid 0olor 1/ 10 1+ '6 11 1. '' 1, )0 1. '0 11 16 '-

uppose the overall utility ;sum of part-worths< of the current favorite commercial office des= is +0 for each customer. What is the product design that will maximi4e the share of choices for the seven sample participants? 8ormulate and solve( using 2indo or ?xcel( this 0 - 1 integer programming problem. AN ! :efine the decision variables! $here are / lij decision variables( one for each level of attribute. lij * 1 if 2ucas chooses level i for attribute jC 0 otherwise. $here are / Yk decision variables( one for each consumer in the sample. Yk * 1 if consumer k chooses the 2ucas brand( 0 otherwise. :efine the ob5ective function! >aximi4e the number of consumers preferring the 2ucas brand des=. >A@ Y1 9 Y' 9 Y) 9 Y, 9 Y+ 9 Y6 9 Y/ :efine the constraints! $here is one constraint for each consumer in the sample. +l11 9 '6l'1 9 '0l)1 9 1-l1' 9 11l'' 9 1/l1) 9 10l') +0Y1 1 1-l11 9 11l'1 9 +l)1 9 1'l1' 9 16l'' 9 1+l1) 9 '6l') +0Y' 1 ,l11 9 16l'1 9 ''l)1 9 /l1' 9 1)l'' 9 11l1) 9 1.l') +0Y) 1 1'l11 9 -l'1 9 ,l)1 9 1-l1' 9 .l'' 9 ''l1) 9 1,l') +0Y, 1 1.l11 9 .l'1 9 )l)1 9 ,l1' 9 1,l'' 9 )0l1) 9 1.l') +0Y+ 1

6l11 9 1+l'1 9 '1l)1 9 -l1' 9 1/l'' 9 '0l1) 9 11l') +0Y6 1 .l11 9 6l'1 9 )l)1 9 1)l1' 9 +l'' 9 16l1) 9 '-l') +0Y/ 1 $here is one constraint for each attribute. l11 9 l'1 9 l)1 * 1 l1' 9 l'' * 1 l1) 9 l') * 1 %ptimal olution! 2ucas should choose these product features! 1 file drawer ;I'1 * 1< No pullout writing boards ;I'' * 1< imulated wood finish ;I1) * 1< $hree sample participants would choose the 2ucas design! #articipant 1 ;Y1 * 1< #articipant + ;Y+ * 1< #articipant 6 ;Y6 * 1< #$ ! 1 $%#! #roduct design and mar=et share optimi4ation

1+. Gloos &ndustries has pro5ected the availability of capital over each of the next three years to be J-+0(000( J1(000(000( and J1('00(000( respectively. &t is considering four options for the disposition of the capital! ;1< 1esearch and development of a promising new product ;'< #lant expansion ;)< >oderni4ation of its current facilities ;,< &nvestment in a valuable piece of nearby real estate >onies not invested in these pro5ects in a given year will N%$ be available for following yearIs investment in the pro5ects. $he expected benefits three years hence from each of the four pro5ects and the yearly capital outlays of the four options are summari4ed in the table below in J1(000(000Is. &n addition( Gloos has decided to underta=e exactly two of the pro5ects( and if plant expansion is selected( it will also moderni4e its current facilities. %ptions New #roduct 1M: #lant ?xpansion >oderni4ation 1eal ?state Aear 1 .)+ .+0 .)+ .+0 0apital %utlays Aear ' Aear ) .++ ./+ .+0 0 .,0 .,+ 0 0 #ro5ected "enefits +.' ).6 ).' '.-

8ormulate and solve this problem as a binary programming problem. AN ! >A@ .$. +.'@1 9 ).6@' 9 ).'@) 9 '.-@, .)+@1 9 .+0@' 9 .)+@) 9 .+0@, 0.-+ ;8irst Aear< .++@1 9 .+0@' 9 .,0@) 1.00 ; econd Aear< ./+@ 1 9 .,+@) 1.'0 ;$hird Aear< @1 9 @' 9 @) 9 @, * '

@' olution! #$ ! 1

9 @)

0 @i * 0 or 1

@1 * 1( @' * 0( @) * 1( @, * 0( $otal pro5ected benefits * J-., million. $%#! 0apital budgeting