4 LINEAR PROGRAMMING APPLICATIONS

4 Linear Programming Applications

32. Wyoming Electric Coop (WEC) owns a steam-turbine power-generating plant.

Since Wyoming is rich in coal deposits, the plant generates its steam from coal.
This, however, may result in emission that does not meet the Environmental
Protection Agency (EPA) standards. EPA regulations limit sulphur dioxide
discharge to 2000 part per million (ppm) per ton of coal burned and the smoke
discharge from the plant stacks to 20 lb per hour. The Coop receives two grades
of pulverized coal, C1 and C2, for use in the steam plant. The two grades
are mixed together before burning. For simplicity, it can be assumed that the
amount of sulphur pollutant discharged (in ppm) is a weighted average of the
proportion of each grade used in the mixture. The following data are based
on consumption of 1 ton per hour of each of the two coal grades.

Sulphur Discharge Smoke Discharge Steam Generated

Coal Grade (ppm) (lb/hour) (lb/hour)
C1 1800 2.1 12,000
C2 2100 0.9 9,000

(a) Determine the optimal ratio for mixing the two coal grades.
(b) Determine the effect of relaxing the smoke discharge limit by 1 lb on the
amount of generated steam per hour.

33. Burroughs Garment Company manufactures men’s shirts and women’s blouses
for Walmark Discount Store. Walmark will accept all the production supplied
by Burroughs. The production process includes cutting, sewing, and packag-
ing. Burroughs employs 25 workers in the cutting department, 35 in sewing
department, and 5 in the packaging department. The factory works on a 8-
hour shift, 5 days a week. The following table gives the time requirements and
profits per unit of the two garments:

Minutes per unit

Garment Cutting Sewing Packaging Unit Profit ($)
Shirts 20 70 12 8
Blouses 60 60 4 12

Determine the optimal weekly production schedule for Burroughs.

34. OilCo is building a refinery to produce four products: diesel, gasoline, lu-
bricants, and jet fuel. The minimum demand (in bbl/day) for each of these
products is 14000, 30000, 10000 and 8000, respectively. Iraq and Dubai are
under contract to ship crude oil to OilCo. Because of the production quo-
tas specified by OPEC (Organization of Petroleum Exporting Countries), the
new refinery can receive at least 40% of its crude from Iraq and the remaining
amount from Dubai. OilCo predicts that the demand and crude oil quotas
will remain steady for the next 10 years.

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The specifications of the two crude oils lead to different product mixes: One bbl
of Iraq crude yields 0.2 bbl of diesel, 0.25 bbl of gasoline, 0.1 bbl of lubricant,
and 0.15 bbl of jet fuel. The corresponding figures from Dubai crude are 0.1,
0.6, 0.15 and 0.1 respectively. OilCo needs to determine the minimum capacity
of the refinery (in bbl/day).

35. A company has been awarded a contract to design a label for a new prod-
uct. The company estimated that 150 hours will be required to complete the
project. Three of the company’s graphic designers are available for the project:
Lisa, a senior designer and team leader; David, a senior designer and Sarah,
a junior designer. Because Lisa has worked on several similar projects earlier,
management has specified that Lisa must be assigned at least 40% of the total
number of hours that are assigned to the two senior designers. To provide label
designing experience for Sarah, Sarah must be assigned at least 15% of the
total project time. However, the number of hours assigned to Sarah must not
exceed 25% of the total number of hours that are assigned to the two senior
designers. Due to other project commitments, Lisa has a maximum 50 hours
available to work on this project. Hourly rates are $30 for Lisa, $25 for Davis
and $18 for Sarah.
Formulate a linear programme that can be used to determine the number
of hours each graphic designer should be assigned to the project in order to
minimize the total cost.

36. An industrial recycling center uses two scrap aluminum metals, A and B,
to produce a special alloy. Scrap A has 6% aluminum, 3% silicon, and 4%
carbon. Scrap B has 3% aluminum, 6% silicon, and 3% carbon. The costs per
ton for scraps A and B are $100 and $80, respectively. The specifications of
the special alloy require that (a) aluminum content must be at least 3% and
at most 6%, (b) the silicon content must lie between 3% and 5%, and (c) the
carbon content must be between 3% and 7%. Determine the optimum mix of
the scraps that should be used in producing 1000 tons of the alloy.

37. Top Toys is planning a new radio and TV advertising campaign. A radio
commercial costs $300 and a TV ad costs $2000. A total budget of $20,000
is allocated to the campaign. However, to ensure that each medium of ad is
used, it has been decided that ad in no medium can use more than 80% of the
total budget. It is estimated that the first radio commercial will reach 5000
people, with each additional commercial reaching only 2000 new ones. For
TV, the first ad will reach 4500 people, and each additional ad an additional
3000. How should the budgeted amount be allocated between radio and TV?

38. The Lake Development Corporation (LDC) is developing a lake-side amuse-

ment park and wishes to advertise the project. The responsibility for this
advertising is given to a professional advertising company, which uses various
types of media to do the same. The effectiveness and quality of each kind of
media is represented by an index called the Exposure Quality Units, or, EQU.

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This measure, among other things, takes into account factors such as audience
demographics (age, income, education, etc. of the audience reached), image
presented, quality of advertisement, etc. The advertising company decides
upon five types of advertising media to start the advertising campaign for the
amusement park. The details of the advertising media are given below:
No. of
Advt. Media Cost per Max times EQU
potential
customers advt available
reached per month
Daytime TV (1 min) 1000 1500 15 65
Evening TV (30 sec) 2000 3000 10 90
Daily Newspaper (full page) 1500 400 25 40
Sunday Newspaper (1/2 page) 2500 1000 4 60
Radio (30 Sec) 300 100 30 20

Restrictions on advertisement media are as follows: At least 10 television com-

mercials must be used, and, no more than 18,000 may be spent on television
advertisements. Recommend an advertisement media selection plan to

(a) Maximize the Exposure Quality Units so that, reaching at least 50,000
potential customers within an advertising budget of 30,000 (for the first
month’s campaign).
(b) Maximize number of customers reached with an advertising budget of
30,000 and with an EQU of at least 1800.
(c) Minimize budget to reach at least 60,000 customers with an EQU of at
least 2000.

39. An automobile manufacturer wants to award a contract for supply of four

different fuel injection system components. Three contractors have submitted
bids of the components. The table below summarizes the prices bid per unit.
If no entry is made, then it means that the contractor has submitted no bid.

Contractor Component
1 2 3 4
1 $20 $50 $40
2 $15 $75 $45 $30
3 $50 $50 $25
Demand 10000 20000 6000 25000

The demand for a component does not have to be supplied by one contractor.
In fact, certain contractors have indicated maximum quantities that can be
supplied at the bid price. Contractor 1 can supply no more than 4000 of item
3, contractor 2 no more than 1000 of item 3 and contractor 3 no more tan
15000 of item 2.
There is no provision that awards must go to the lowest bidder. The automo-
bile manufacturer wants to determine how many units of each item should be
awarded to each contractor so as to minimize the total cost of the four items.

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Contractor 1 has specified that it requires a minimum award of $20000 if it

is to supply any item at all. The automobile manufacturer wants to avoid
awarding over $1 million to any one contractor. Formulate an LP model for
minimizing the total cost of procurement of the four items.

40. The city of Erstville is faced with a severe budget shortage. Seeking a long-
term solution, the city council votes to improve the tax base by condemning
an inner-city housing area and replacing it with a modern development.
The project involves two phases: (A) demolishing substandard houses to pro-
vide land for the new development, and, (B) building the new development.
The following is a summary of the situation:

(a) As many as 300 standard houses can be demolished. Each house occupies
a 0.25-acre lot. The cost of demolishing a condemned house is $2000.
(b) Lot sizes for single-, double-, triple- and quadruple-family homes (units)
are 0.18, 0.28, 0.40 and 0.50 acre, respectively. Streets, open space, and
utility easements account for 15% of available acreage.
(c) In the new development, the triple and quadruple units account for at
least 25% of the total. Single units must be at least 20% of all units and
double units at least 10%.
(d) The tax levied per unit of single, double, triple and quadruple units are
$1000, $1900, $2700, and, $3400, respectively.
(e) The construction cost per unit of single-, double-, triple-, and quadruple-
family homes is $50,000, $70,000, $160,000, and, $200,000 respectively.
Financing through a local bank is limited to $15,000,000.

How many units of each type should be constructed to maximize tax collection?

41. A city will undertake four urban renewal housing projects over the next five
years. Each project has different starting year and a different duration. The
following table provides the basic data of the situation:

Cost Income/Yr.
Year 1 Year 2 Year 3 Year 4 Year 5 (million $) (million $)
Project 1 Start End 5.0 0.05
Project 2 Start End 8.0 0.07
Project 3 Start End 15.0 0.15
Project 4 Start End 1.2 0.02
Budget
3.0 6.0 7.0 7.0 7.0
(million $)

Projects 1 and 4 must be finished completely within their durations. The

remaining two projects can be finished partially within budget limitations,
if necessary. However, each project must be at least 25% completed within
its duration. At the end of each year, the completed section of a project
is immediately occupied by tenants, and a proportional amount of income

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is realized. For example, if 40% of project 1 is completed in year 1, and

rest 60% in year 3, the associated income over the 5-year planning horizon is
0.4 × $50, 000 (for year 2) + 0.4 × $50, 000 (for year 3) + (0.4 + 0.6) × $50, 000
(for year 4) + (0.4 + 0.6) × $50, 000 (for year 5) = $140, 000. Develop an LP
model to determine the schedule for the projects that will maximize the total
income over the 5-year horizon. (Disregard the time value of money).
42. An engineering project needs to place three sensors in the ceiling, each con-
nected to a central reporting system. Due to the design of the ceiling, the
wiring between sensors and the central reporting system can run along hori-
zontal and/or vertical tracks in the ceiling. A map looking like a coordinate
system describes where the censors are to be placed. If the “origin” is the
south-west corner of the room, then the three sensors are located at (10,3),
(5,15) and (20,25). Our job is to place the central unit. We are asked to come
up with models that (a) minimize the total length of wire and (separately) (b)
minimize the maximum wire length from a sensor to the central unit.
43. Minimize Total Absolute Deviation: You are given bivariate data (xi , yi ),
i = 1, 2, 3, 4. You have to find out a and b so that, the following quantity
|y1 − ax1 − b| + |y2 − ax2 − b| + |y3 − ax3 − b| + |y4 − ax4 − b|
is minimum, where |w| means modulus of w. Formulate this as an LPP.
44. The Pacific Paper Company produces paper rolls in standard width of 20 feet
each. Specific customer orders of different widths are met by slitting these
standard rolls to the desired width. A customer has ordered for 150 rolls of 5
feet width, 200 rolls of 7 feet width and 300 rolls of 9 feet width. Whenever the
standard 20 feet wide rolls are slit to various widths ordered by customers, the
operation produces trim losses of various widths and extra rolls. The company
wants to supply these rolls and at the same time, wants to minimize the trim
loss/extra rolls produced. How many standard rolls should be slit and in what
manner?
45. A grocery store must decide on the shelf-space to be allocated to each of five
types of breakfast cereals. The maximum daily demand is of 100, 85, 140,
80 and 90 boxes respectively. The required shelf-space (in square inch per
box) are 16, 24, 18, 22, and 20, respectively. The total available shelf-space is
5000 square inch. The profit is (in $ per box) 1.10, 1.30, 1.08, 1.25 and, 1.20
respectively. Determine the optimal space allocation for these five cereals.
46. Exeter Mines produces iron ore at four different mines. The type or ore,
iron content (%), maximum extraction limit (tons), and production cost (ex-
taction+processing) ($/ton) are: Mine 1 (magnetite, 70, 350, 37), Mine 2
(limonite, 60, 530, 46), Mine 3 (pyrite, 50, 610, 50), Mine 4 (taconite, 30,
490, 42). Exeter has three customers that produce steel – Armco, Best, and
Corcom, needing 400, 250, and 290 tons of pure (100%) iron respectively.
The company wants to know how much ore to produce at each mine to meet
customers’ demand at minimum cost.

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47. Bank Loan Model: Bank One is in the process of devising a loan policy that
involves a maximum of $12 million. The following table provides the pertinent
data about available loans. (Bad debts are unrecoverable and produce no
interest revenue.)

Type of Loan Interest Rate (%) Bad-debt Ratio

Personal 14.0 0.10
Car 13.0 0.07
Home 12.0 0.03
Farm 12.5 0.05
Commercial 10.0 0.02

Competition with other financial institutions dictates the allocation of at least

40% of the funds to farm and commercial loans. To assist the housing industry
in the region, home loans must equal at least 50% of the personal, car, and
home loans. The bank limits the overall ratio of bad debts on all loans to at
most 4%. The objective is to earn maximum interest income.

48. Hewitt Corporation has established an early retirement programme as a part

of its corporate restructuring. At the close of the voluntary sign-up period, 68
employees chose for early retirements. As a result of these early retirements,
the company has incurred the following financial obligations for the next 8
years. Cash requirements (in thousands of dollars) are due at beginning of
each year:

Year 1 2 3 4 5 6 7 8
Cash Reqd. 430 210 222 231 240 195 225 255

The financing plan for this retirement programme includes investment in gov-
ernment bonds as well as keeping money in savings bank accounts. The in-
vestment in government bonds is limited to three choices:

Bond Price Annual Rate Years to

of Interest Maturity
1 1150 8.875 5
2 1000 5.500 6
3 1350 11.750 7

The government bonds have a par value of $1000 which means, even with
different purchase prices, the bonds pay interest at the par value and pays
$1000 on maturity. For the purpose of planing, the treasurer has assumed
that any funds not invested in bonds will be placed in savings account and
will earn an interest of 4% per annum. All bonds are to be purchased at
the beginning of the first year only and the bonds are held until maturity.
The objective is to minimize the total dollars needed to fund the retirement
programme.

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49. A person is trying to plan for his daughter’s college expenses. Based on the
current projections (it is now start of year 1), he anticipates that his financial
needs at the start of each of the following years will be as shown in Table 1
below. The person has several investment choices to choose from at the present
time as listed in Table 2 below. Each choice has a fixed return on investment
(ROI) and a specified maturity date. Assume that each choice is available for
investment at the start of every year and and also assume that returns are
tax-free if used for education. Because choices C and D are relatively risky
choices, the person wants no more than 20% of his total investment in those
two choices at any point of time.
The person wants to establish a sinking fund to meet his requirements. Note
that at the start of year 1, the entire initial investment is available for investing
in the choices. However, in subsequent years, only the amount maturing from
a prior investment is available for investment.
Table 1 Table 2
Year $ Needed Choice ROI Maturity
3 20000 A 5% 1 year
4 22000 B 13% 2 years
5 24000 C 28% 3 years
6 26000 D 40% 4 years

50. Progress City is Studying the feasibility of introducing a mass transit bus
system that will alleviate the smog problem by reducing the in-city driving.
The initial study seeks the determination of the minimum number of buses that
can handle the transportation needs. After gathering necessary information,
the city engineer noticed that the minimum number of needed buses fluctuates
with the time of the day. Studying the data further, it became evident that
the required number of buses can be approximated by constant values over
successive intervals of 4 hours each. The table below summarizes the engineer’s
findings. To carry out the daily maintenance, each bus could operate only 8
successive hours a day.
It is required to determine the number of buses to operate during differ-
ent shifts (variables) that will meet the minimum requiredtop demand (con-
straints) while minimizing the number of daily buses in operation (objective).

4 hour Start 00:00 04:00 08:00 12:00 16:00 20:00

interval End 04:00 08:00 12:00 16:00 20:00 24:00
No. of Buses 4 8 10 7 12 4

51. The Silver Star Bicycle Company will be manufacturing both Men’s and
Women’s bicycles during the next two months. Management wants to develop
a production schedule indicating how many bicycles of each model should be
produced each month. Current demand forecasts call for 150 Men’s and 125
Women’s bicycles to be shipped during the first month and 200 Men’s and 150
Women’s bicycles to be shipped during the second month. Additional data
are shown below:

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Production Labour Requirements (Hours)

Model Costs Manufacturing Assembly Inventory
Men’s $120 2.0 1.5 20
Women’s $90 1.6 1.0 30

Last month the company used a total of 1000 hours of labour. The company’s
labour relations policy will not allow the combined total hours of labour (man-
ufacturing plus assembly) to increase or decrease by more than 100 hours from
month to month. In addition, the company charges inventory at the rate of
2% of the production cost based at the end of the month. The company would
like to have at least 25 units of each model in inventory at the end of two
months.
Establish a production schedule that minimizes production and inventory costs
and satisfies labour smoothing, demand and inventory requirements.

52. The table below shows a system of highways where traffic enters only through
Point 1 and exits only through Point 7. In between, the flow capacity (in
number of vehicles per hour) of various direct routes are given. Formulate an
LPP that will show the maximum flow of traffic through the highway system
(in number of vehicles per hours).

Entry Exit Point

Point 1 2 3 4 5 6 7
1 5 6 5
2 2 3
3 2 3 3 7
4 5
5 1 8
6 1 7

53. PM Computers assembles its own brand of personal computers from com-
ponent parts it purchases from overseas and domestically. PM has enough
production capacity to produce 160 computers per week. It can produce an
additional 50 computers (per week) with overtime. The cost of assembling,
inspecting, and packaging a computer is $190 during regular time, and $260
with overtime. Also, it costs $10 per week to hold a computer in inventory for
future delivery. PM wants to meet all customer orders, without shortage, to
provide quality service. The demands over the next six weeks is given below.
PM wants to determine a schedule that will indicate how much regular and
overtime production is to be done each week to meet all orders at minimum
cost, with no computer left at end of week six.

Week 1 2 3 4 5 6
Computer Orders 105 170 230 180 150 250

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54. Crude Oil refining and Gasoline Blending: Shale Oil has a capacity of
1,500,000 bbl of crude oil per day. The final products from the refinery in-
clude three types of unleaded gasoline with different octane numbers1 (ON):
regular with ON=87, premium with ON=89 and super with ON=92. The re-
fining process encompasses three stages: (1) a distillation tower that produces
feedstock (ON=82) at the rate of 0.2 bbl per bbl of crude oil, (2) a cracker
unit that produces gasoline stock (ON=98) by using a portion of the feedstock
produced from the distillation tower at the rate of 0.5 bbl per bbl of feedstock,
and (3) a blender unit that blends the gasoline stock from the cracker unit
and the feedstock from the distillation tower2 . The company estimates the net
profit per barrel of the three types of gasoline to be $6.70, $7.20 and $8.10
respectively. The input capacity of the cracker unit is 200,000 barrels of feed-
stock a day. The demand limits for regular, premium and super gasoline are
50,000, 30,000 and 40,000 barrels, respectively, per day. Develop a model for
determining the optimum production schedule for the refinery.

55. An oil company distills two types of crude oil, A and B, to produce regular
and premium gasoline and jet fuel. There are limits on the daily availability if
crude oil and the minimum demand for the final products. If the production is
not sufficient to cover the demand, the shortage must be made up from outside
sources at a penalty. Surplus production will not be sold immediately and will
incur storage cost. The following table provides the data of the situation.
Develop an LP model to determine the optimal product mix for the refinery.

Fraction yield per bbl Price/bbl Availability

Crude Regular Premium Jet ($) (bbl/day)
Crude A 0.20 0.10 0.25 30 2500
Crude B 0.25 0.30 0.10 40 3000
Demand (bbl/day) 500 700 400
Revenue ($/bbl) 50 70 120
Storage cost for surplus
production ($/bbl) 2 3 4
Penalty for unfilled
demand ($/bbl) 10 15 20

56. In the situation of problem 55, suppose that the distillation unit actually
produces the intermediate products naphtha and light oil. One bbl of crude A
produces 0.35 bbl of naphtha and 0.60 bbl of light oil, and one bbl of crude B
produces 0.45 bbl of naphtha and 0.50 bbl of light oil. Naphtha and light oil
are blended to produce the three final gasoline products: One bbl of regular
gasoline has a blend ratio of 2:1 (naphtha to light oil), one bbl of premium
gasoline has a blend ratio of 1:1, and, one bbl of jet fuel has a blend ratio of
1:2. Formulate this problem as LP and find optimal product mix.
1
This means that regular gasoline can not have ON < 87.
2
If F bbl of feedstock is blended with G98 bbl of Gasoline of 98 octane number, then output
will be F + G98 bbl of Gasoline of octane number (82F + 98G98 )/(F + G98 ).

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57. Data Envelopment Analysis (DEA): the hospital administrators at Gen-

eral Hospital (GH), University Hospital (UH), County Hospital (CH) and State
Hospital (SH) have been meeting to discuss ways in which they can improve
the performance at each of their hospitals. A consultant suggested that they
consider using DEA to measure performance of each hospital relative to the
performance of all four hospitals. In discussing how this evaluation could
be done, the following three input measures and four output measures were
identified:
Input measures: (a) The number of full-time equivalent (FTE) non-physician
personnel (b) The amount spent on supplies and, (c) The number of bed-days
available.
Output measures: (d) Patient-days of service under Medicare, (e) Patient-
days of service not under Medicare, (f) Number of nurses trained and, (g)
Number of interns trained.
Summaries of input and output measures for a one-year period at each of the
four hospitals are shown in the following table. Using the two information
below the table, evaluate the efficiency of the county hospital and conclude.

Hospitals
Input Measures General University County State
FTE non-physicians 285.20 162.30 275.70 210.40
Supply Expense($1000) 123.80 128.70 348.50 154.10
Bed-days Available (1000) 106.72 64.21 104.10 104.04
Output Measures
Medicare Patient-days (1000) 48.14 34.62 36.72 33.16
Non-Medicare Patient-days (1000) 43.10 27.11 45.98 56.46
Nurses Trained 253 148 175 160
Interns Trained 41 27 23 84

(a) Construct a hypothetical hospital (HH) by taking a convex linear combi-

nation of these hospitals. It means that we assign weight wg , wu , wc , ws to
the General, University, County and State hospitals so that each weight
is ≥ 0 and their sum is unity, that is

HH = wg × GH + wu × U H + wc × CH + ws × SH

An input measure of this composite hospital will be defined as the same

convex combination of that input measure of the four hospitals. For
example, F T E(HH) equals

wg × F T E(GH) + wu × F T E(U H) + wc × F T E(CH) + ws × F T E(SH)

= wg × 285.20 + wu × 162.30 + wc × 275.70 + ws × 210.40

The output measures of HH are defined similarly.

(b) Idea behind DEA: The composite hypothetical hospital (HH) should
use at most a fraction E of input available to the county hospital (CH)

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and yet produce at least as much output as CH. If E < 1, then CH is

inefficient, though E = 1 does not mean that CH is efficient. E is called
the efficiency index.
(c) Perform same analysis for other hospitals as well.

58. Traffic Light Control: Automobile traffic from three highways, H1, H2 and
H3, must stop and wait for a green light before exiting to a toll road. The tolls
are $3, $4 and $5 for cars exiting from H1, H2 and H3, respectively. The flow
rates from H1, H2 and H3 are 500, 600, and 400 cars per hour. The traffic
light cycle may not exceed 2.2 minutes, and the green light on any highway
must be on for at least 22 seconds. The yellow light is on for 10 seconds.
The toll gate can handle a maximum of 510 cars per hour. Assume that no
cars move on yellow. Determine the optimal green time interval for the three
highways that will maximize toll gate revenue per traffic cycle.

59. Assembly Line Balancing: A product is assembled using one unit of each
of three different parts: A, B, and, C. The parts are manufactured by two
departments D and E at different production rates as given below:

Capacity Production rate (units/hr)

Department (hr/wk) Part A Part B Part C
D 100 6 6 12
E 90 6 12 4

Determine the maximum number of assembled units to be produced per week.

60. Allocation of Aircrafts to Routes: Consider the problem of assigning

aircrafts to four routes according to the following data. Determine the optimal
allocation of aircraft that minimizes the total operating cost and penalty cost.

Aircraft Capacity Num. of no. of trips/aircraft/day

type (seats) aircraft Rt 1 Rt 2 Rt 3 Rt 4
1 50 5 3 2 2 1
2 30 8 4 3 3 2
3 20 10 5 5 4 2
Daily no. of customers 1000 2000 900 1200

Aircraft oper. cost($)/trip/aircraft

type Rt 1 Rt 2 Rt 3 Rt 4
1 1000 1100 1200 1500
2 800 900 1000 1000
3 600 800 800 900
Penalty($) per
40 50 45 70
lost customer

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