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Reddy Mikks Problem

The document discusses two optimization problems: 1) determining the optimal production amounts of interior and exterior paints given material constraints to maximize gross income, and 2) determining the optimal allocation of an advertising budget to radio and TV to maximize expected sales. The problems require setting up and solving linear programs.

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Manjunath Maigur
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1K views1 page

Reddy Mikks Problem

The document discusses two optimization problems: 1) determining the optimal production amounts of interior and exterior paints given material constraints to maximize gross income, and 2) determining the optimal allocation of an advertising budget to radio and TV to maximize expected sales. The problems require setting up and solving linear programs.

Uploaded by

Manjunath Maigur
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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1)(The Reddy Mikks Company):The Reddy Mix Company owns a small paint factory that

produces both exterior and interior house paints for wholesale distribution. Two basic raw
materials A and B are used to manufacture the paints. The maximum availability of A is 6 tons
a day and that of B is 8 tons a day. The daily requirements of the raw materials per ton of
interior and exterior paints are summerized in the following table:

Tons of Raw Material per ton of Paint Maximum


Exterior Interior Availability
Raw Material A 1 2 6
Raw Material B 2 1 8

A market survey has established that the daily demand for interior paint can not exceed that of
the exterior paint by more than 1 ton. The survey also shows that the maximum demand for
interior paint is limited to 2 tons daily.

The whole sale price per ton is $3000 for exterior paint and $2000 for interior paint.

How much interior and exterior paints should the company produce daily to maximize the
gross income.

Carryout the complete sensitivity analysis


● Sensitivity Problem-1: Which resource to change to improve the gross income or
without chnaging the gross income?
● Sensitivity Problem-2: How to give priority?
● Sensitivity Problem-3: How much change in the objective function coefficients?

2)(The advertisement Problem):A company can advertise its products by using local radio
and TV stations. Its budget limits the advertisement expenditure to $1000 a month. Each
minute of radio advertisement costs $5 and that on TV costs $100. The company would like to
use the radio at least twice as much as the TV. Past experience shows that each minute of TV
advertisement will usually generate 25 times as much sales as each minute of radio
advertisement. Determine the optimum allocation of the monthly budget to radio and TV
advertisement.

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