Case Study _LP-Applications in Operations

Case Study-1:
The manager of an plastic injection unit, must decide on an optimal mix of two possible
blending processes of which the input and output per production run are given below:

Input(units) Output (units)

Process Component-A Component-B Product-A Product-B

1 5 3 5 8

2
4 5 4 4

The availability of Component-A and B is 200 units and 150 units respectively, Market
requirements show that at least 100 units of Product-A and 80 units of Product-B must be
produced. The profit per production run from Process-1 and Process-2 are Rs.300 and Rs.400
respectively. What product mix should the manger adopt to make maximum profit?
Case Study-2:
An engine manufacturing firm has two plants located at Chennai and Bhopal. Small engine
piston orders from four customers have been received for the year of 2014. The number of
units ordered by each customer and the shipping costs from each plant are shown in the
following table:

Customer Units Ordered Shipping Cost (Rs. per unit)

From Plant-1 From Plant-2
A 500 15 40
B 300 20 30
C 1000 30 25
D 200 35 20

Each unit of the product must be machined and assembled. These costs, together with the
capacities at each plant, are shown in below:

Hours/ unit Cost (Rs.)/ Hour Hours available

Plant-1
Machining 0.1 40 120
Assembling 0.2 30 260
Plant-2
Machining 0.11 40 140
Assembling 0.22 30 250

To find how the engine manufacturing firm should organize its production and distribution
system, in order to send each customer at the minimum cost.
Case Study-3:

A Farm Equipment company produces a seeding machine, in this product consists of 5 units
of component A and 4 units of component B. The two components A and B are manufactured
from two different raw materials of which 50 units and 40 units respectively are available
(common resource). Production of components A and B takes place in three separate plants.
Raw materials required per production run or Batch and the resulting units of each
component are:

Plant Input/ Run Output / Run

Raw material-1 Raw material-2 Component-1 Component-2
1 8 6 7 5
2 5 9 6 9
3 3 8 8 4

Formulate the problem and find maximum profit.

Case Study-4:
The Farm equipment Limited has two plants, each of which produces and supplies two
products: Crown wheel pinion and Cam shaft. Plants can each work up to 16 hours per day.
In plant 1, it takes 3 hours to prepare 1000 units of Crown wheel pinion and 1-hour to prepare
100 units of Cam shaft. In Plant 2, it takes 2 hours to prepare 1000 units of Crown wheel
pinion and 1.5-hours to make 100 units of Cam shaft. In plant 1, it costs $.5000 to prepare
1000 unit Crown wheel pinion and $.2800 to prepare 100 units of Cam shaft, whereas these
costs are $6000 and $3200 respectively in Plant2. The Farm equipment Limited has a
standing order of 10000 units of Crown wheel pinion and 8000 units of Cam shafts every
day. To find how the company should organise its production so that the required amounts of
the two products can be obtained at minimum cost.
Case Study-5:
The XYZ Tractors India Limited receives an order from a ABC Agricultural Development
Authority (AADA) for Six Special Tractors cum Cruzer, to be delivered two at a time over
the next months(i.e., demand: 2units/month). The production data for the manufacturer is
shown in the following table:

Months
1 2 3
Regular production capacity (in units) 1 2 3
Overtime production capacity (in units) 2 2 2
Regular production cost (0000’s Rs.) / Unit 35 43 40
Overtime production cost (0000’s Rs.)/Unit 39 47 45

Tractors cum Cruzer can be delivered in the Chennai City AADA office at the end of the
same month in which they are assembled or they can be stored by the manufacturer at a cost
of Rs. 3000 per Tractors cum Cruzer per month. The manufacturer has no current inventory
of these Tractors cum Cruzer and desires none after the completion of this contract.

To determine a production schedule that will meet the corporation’s demand at minimum cost
to the manufacturer.
Case Study-6:
Larkin Industries manufactures several lines of decorative and functional metal items. The most recent
order has been for 1200 door lock units for an apartment complex developer. The sales and production
departments must work together to determine delivery schedules. Each lock unit consists of three
components: the knob and face plate, the actual lock itself, and a set of two keys. Although the
processes used in the manufacture of the three components vary, there are three areas where the
production manager is concerned about the availability of resources. These three areas, their usage by
the three components, and their availability are detailed in the table.

Resource Knob and Plate Lock Key (each) Available

Brass Alloy 12 5 1 15000 units
Machining 18 20 10 36000 minutes
Finishing 15 5 1 12000 minutes

A quick look at the amounts available confirms that Larkin does not have the resources to fill this
contract. A subcontractor, who can make an unlimited number of each of the three components,
quotes the prices below.

Component Subcontractor Larkin Cost/unit

Cost/unit
Knob and Plate 10.00 6.00
Lock 9.00 4.00
Keys (set of 2) 1.00 .50

Develop a linear programming model that would tell Larkin how to fill the order for 1200 lock sets at
the minimum cost.
Case Study-7:
G and P Manufacturing would like to minimize the labor cost of producing dishwasher motors for a
major appliance manufacturer. Although two models of motors exist, the finished models are
indistinguishable from one another; their cost difference is due to a different production sequence.
The time in hours required for each model in each production area is tabled here, along with the labor
cost.

Model 1 Model 2
Area A 15hrs 3hrs
Area B 4hrs 10hrs
Area C 4hrs 8hrs
Cost/unit 80$ 65$

Currently labor assignments provide for 10,000 hours in each of Areas A and B and 18000 hours in
Area C. If 2000 hours are available to be transferred from area B to Area A, 3000 hours are available
to be transferred from area C to either Areas A or B, develop the linear programming model whose
solution would tell G&P how many of each model to produce and how to allocate the workforce.
Case Study-8:
The Tots Toys Company is trying to schedule production of two very popular toys for the next three
months: a rocking horse and a scooter. Information about both toys is given below.

Begin. Invty. Required Required Production Inventory

Toy June 1(units) Plastic Time(hr) Cost/unit Cost/month/unit
(units)
Rocking Horse 25 5 2 12 1
Scooter 55 4 3 14 1.2

Plastic Time Monthly Demand Monthly Demand

Summer Schedule Available(units) Available(hr) Horse(units) Scooter(units)
June 3500 2100 220 450
July 5000 3000 350 700
August 4800 2500 600 520

Develop a model that would tell the company how many of each toy to produce during each month.
You are to minimize total cost. Inventory cost will be levied on any items in inventory on June 30,
July 31, or August 31 after demand for the month has been satisfied. Your model should make use of
the relationship for each month.

Beginning Inventory + Production  Demand = Ending Inventory

The company wants to end the summer with 150 rocking horses and 60 scooters as beginning
inventory for Sept. 1. Don't forget to define your decision variables.
Case Study-9:
A&C Distributors is a company that represents many outdoor products companies and schedules
deliveries to discount stores, garden centers, and hardware stores. Currently, scheduling needs to be
done for two lawn sprinklers, the Water Wave and Spring Shower models. Requirements for shipment
to a warehouse for a national chain of garden centers are shown below.
Shipping Minimum Unit Cost Per Unit
Month Capacity Product Requirement to Ship Inventory
Cost/month
March 8000 Water Wave 3000 .30 .06
Spring Shower 1800 .25 .05
April 7000 Water Wave 4000 .40 .09
Spring Shower 4000 .30 .06
May 6000 Water Wave 5000 .50 .12
Spring Shower 2000 .35 .07

Let Sij be the number of units of sprinkler i shipped in month j, where i = 1 or 2, and j = 1, 2, or 3. Let
Wij be the number of sprinklers that are at the warehouse at the end of a month, in excess of the
minimum requirement.
a Write the portion of the objective function that minimizes shipping costs.
b. An inventory cost is assessed against this ending inventory. Give the portion of the
objective function that represents inventory cost.
c. There will be three constraints that guarantee, for each month, that the total number of
sprinklers shipped will not exceed the shipping capacity. Write these three constraints.
d. There are six constraints that work with inventory and the number of units shipped,
making sure that enough sprinklers are shipped to meet the minimum requirements. Write
these six constraints.
Case Study-10:
Vollmer Manufacturing makes three components for sale to refrigeration companies. The
components are processed on two machines: a shaper and a grinder. The times (in hours)
required on each machine are as follows:

The shaper is available for 120 hours, and the grinder is available for 110 hours. No more
than 200 units of component 3 can be sold, but up to 1000 units of each of the other
components can be sold. In fact, the company already has orders for 600 units of component-
1 that must be satisfied. The profit contributions for components 1, 2, and 3 are $8, $6, and
$9, respectively.
Formulate and solve for the recommended production quantities.
Case Study-11:
Georgia Cabinets manufactures kitchen cabinets that are sold to local dealers throughout the
Southeast. Because of a large backlog of orders for oak and cherry cabinets, the company
decided to contract with three smaller cabinetmakers to do the final finishing operation. For
the three cabinetmakers, the number of hours required to complete all the oak cabinets, the
number of hours required to complete all the cherry cabinets, the number of hours available
for the final finishing operation, and the cost per hour to perform the work are shown here.

(a). Formulate a linear programming model that can be used to determine the percentage of
the oak cabinets and the percentage of the cherry cabinets that should be given to each of the
three cabinetmakers in order to minimize the total cost of completing both projects.

(b). Solve the model formulated in part (a). What percentage of the oak cabinets and what
percentage of the cherry cabinets should be assigned to each cabinetmaker? What is the total
cost of completing both projects?
Case Study-12:
Benson Electronics manufactures three components used to produce cell telephones and other
communication devices. In a given production period, demand for the three components may
exceed Benson’s manufacturing capacity. In this case, the company meets demand by
purchasing the components from another manufacturer at an increased cost per unit. Benson’s
manufacturing cost per unit and purchasing cost per unit for the three components are as
follows:

Manufacturing times in minutes per unit for Benson’s three departments are as follows:

For instance, each unit of component 1 that Benson manufactures requires 2 minutes of
production time, 1 minute of assembly time, and 1.5 minutes of testing and packaging time.
For the next production period, Benson has capacities of 360 hours in the production
department, 250 hours in the assembly department, and 300 hours in the testing and
packaging department.

(a). Formulate a linear programming model that can be used to determine how many units of
each component to manufacture and how many units of each component to purchase. Assume
that component demands that must be satisfied are 6000 units for component 1, 4000 units for
component 2, and 3500 units for component 3. The objective is to minimize the total
manufacturing and purchasing costs.

(b).What is the optimal solution? How many units of each component should be
manufactured and how many units of each component should be purchased?
Case Study-13:
Golf Shafts, Inc. (GSI), produces graphite shafts for several manufacturers of golf clubs. Two
GSI manufacturing facilities, one located in San Diego and the other in Tampa, have the
capability to produce shafts in varying degrees of stiffness, ranging from regular models used
primarily by average golfers to extra stiff models used primarily by low-handicap and
professional golfers. GSI just received a contract for the production of 200,000 regular shafts
and 75,000 stiff shafts. Because both plants are currently producing shafts for previous
orders, neither plant has sufficient capacity by itself to fill the new order. The San Diego
plant can produce up to a total of 120,000 shafts, and the Tampa plant can produce up to a
total of 180,000 shafts. Because of equipment differences at each of the plants and differing
labor costs, the per-unit production costs vary as shown here:

(a). Formulate a linear programming model to determine how GSI should schedule
production for the new order in order to minimize the total production cost.
(b). Solve the model that you developed in part (a).
Case Study-14:
The program manager for Channel 10 would like to determine the best way to allocate the
time for the 11:00–11:30 evening news broadcast. Specifically, she would like to determine
the number of minutes of broadcast time to devote to local news, national news, weather, and
sports. Over the 30-minute broadcast, 10 minutes are set aside for advertising. The station’s
broadcast policy states that at least 15% of the time available should be devoted to local news
coverage; the time devoted to local news or national news must be at least 50% of the total
news time; the time devoted to the weather segment must be less than or equal to the time
devoted to the sports segment; the time devoted to the sports segment should be no longer
than the total time spent on the local and national news; and at least 20% of the time should
be devoted to the weather segment. The production costs per minute are $300 for local news,
$200 for national news, $100 for weather, and $100 for sports.

Formulate and solve a linear program that can determine how the 20 available minutes should
be used to minimize the total cost of producing the program.