Chapter 16 - Linear Programming C. LINEAR PROGRAMMING } Multiple Choice Questions 1, A quantitative tebhnique used for selecting the combination of resources that maximizes profits or minimizes costs is (a) nonlinear analysis, (b) queuing theory, (©) dynamic programming, (4) linear programming. 2. Linear programming. is an operations research technique that allocates resources. ~ Mathematical expressions are used to describe the problem. The measures of effectiveness that is to be maximized or minimized is called, (b) the constraints, (b) the decision variables,(c) the objective function (d) the derivative of the function, (©) the nonlinear function. 3. A 200-bed hospital serves 500 meals per day. An analytic tool which would help them plan meals to meet nutrition goals at minimum cost is (a) Monte Carlo simulation, (b) Linear programming, (c) Materials requirements planning, (d) Markov analysis. 4, A manufacturer has developed four new products and must decide how much of each should be manufactured to maximize profit. The constraints for each product include a fixed limit to the amount of Chemical A that can be used per run and the amount of each product that can be successfully marketed. To determine optimum production, which of the following mathematical models should be used? (a) Linear programming, (b) Minimum-spanning tree, (c) CPM (d) Monte Carlo simulation. 5. An internal auditor for a wood-products company is reviewing a linear programming model. Which of the following would not be in the model? (a) independent variables, (b) networks, (c) dependent variables, (d) constraints, (e) slack variables. 6. Which of the following is not an essential step in using a linear programming model? (a) quantify the maximization coefficient inflows, (b) determine the objective function, (c) establish the basic relationships between the variables and the constraints, (4) Identify the feasible alternatives, (e) solve the equations to find the optimal alternative. 7. The objective of the transportation model is to minimize the cost of transporting resources from one location to another. This model is a specific application of (a) dynamic programming, (b) queuing theory, (c) game theory, (4) linear programming (©) regression analysis. 527Chapter 16 - Linear Programming 10. ML 12. 13. 14. 528 Of the following methods, the one that would not be appropriate for analyzing how a specific cost behaves is (a) the scattergraph method, (b) the industrial engineering approach, (c) linear programming, (€) the high-low method, (@) statistical regression analysis. Long Corporation uses linear programming in its production mix, One alternative they are considering is expansion of production facilities, thereby relaxing a binding constraint. The increase to the contribution margin that would result from increasing the capacity by one unit is referred to in linear programming as the (8) shadow price, (b) production cost, (c) capacity price, (d) market price, (e) sunk cost. In a system of equations for a linear programming model, what can be done to equalize an inequality ‘such as 3X + 2Y 6 15? (a) nothing (b) adda slack variable, (©) add a tableau, (4) multiply each element by - 1- Which of the following is not an application of linear programming techniques? (a) scheduling flight crews to various flights to minimize costs, (b) routing production to minimize costs, (c) determining the optimum trade-off between time and costs to maximize profits, (4) deciding which warehouses will service which customers to ‘minimize total shipping costs. ‘What is the simplex method of linear programming? (a) a general procedure of linear programming that will solve only two variables simultaneously, (b) a means of determining the objective function in the model, (c) a means of determining the ‘constraints in the model, (4) a general procedure for solving linear programming models. Given the basic equations for the maximization of profits in a linear programming model, what quantitative technique would generally be employed to arrive at an optimal solution? (a) regression analysis, (b) markov analysis, (c) Monte Carlo analysis, (d) simplex method analysis. Given below is the final solution for which type of problem? 0 1 o 0550 1 0 -5 sll 0 0: 0 5-20 667: 0 a. Linear programming cc Material requirements planning 'b. Markov absorbing chain 4, Two-line, three-server queuing systemChapter 16 - Linear Programming 15. 16. 17. 18, “The graphic method as a means for solving linear programming problems (a) can be ‘used when there are more than two restrictions (constraints). (b) is limited to, situations in which there are two restrictions (constraints), (c) is limited to situations in which there is one restriction (constraint), (4) cannot be used if there are any restrictions, (constraints). ‘When using the graphic method of solving a linear programming problem, which of the following would be depicted on the graph? Line of Best fit Optimum Comer Point a No No b. No Yes ¢, Yes No 4. ‘Yes Yes When using the graphic method of solving a linear programming problem, which of the following would be depicted on the graph? (a) coefficient of correlation, (b) line of best fit, (c) critical path, (4) constraint. tems 18 through 25 are based on Hale Company, which manufactures products A ‘and B, each of which requires two processes , polishing and grinding, The contribution margin is P3 for Product A and P4 for Product B. The graph below shows the maximum number of units of each product that may be processed in the ‘two departments. hits of Product B 10 20 30 40 nits of Product Considering the constraints (restrictions) on processing, which combination of products A and B maximizes the total contribution margin? ( a) 0 units of A and 20 units of B, (b) 20 units of A and 10 ‘units of B, (c) 30 units of A and 0 units of B, (d) 40 units of A and 0 units of B. 529Chapter 16- Linear Programming 19. What is the polishing constraint if A requires 2 hours of both grinding and polishing and B requires 4 hours of grinding and 2 hours of polishing? (@) 2A +4B6 80 (© 20A+10B6 100 (0) 2A +4B 6 60 (@ 30A+30B6 30 20. What is the grinding constraint if A requires 2 hours of both grinding and polishing and B requires 4 hours of grinding and 2 hours of polishing? (@) 3A + 4B 6 20440 (©)30A + 20B 6.50 (b) 2A + 4B 6 80 @2A +2B 6 60 21. What is the slope of the polishing constraint? a if ae e. 1/2 d-1/l 22. Constraint lines in linear programming usually have a negative slope. Which is an example of a constraint line that is not a negative slope? a. 2X +7Y 6 40 e&PX+Y 0 40 b. 7X + 2¥6 40 d. ¥6 40 23, What is the slope of the grinding constraint? a. -3/4 b. -172 «2 4-43 24, What is the slope of the objective function? a. -2/4 b. 33 e344” 4-4/3 25. What combination of A and B lies on the same objective function line? A B a 40 20 b. 20. 40 c. 30 30 ad 40 30 530Chapter 16 - Linear Programming 26. An internal auditor is reviewing the following linear programming model for expected output of @ production department: A Machine 1 Product Y : Production. ~ © Machine 2 in units constraint roduct-m ix E Product X: Production in ‘The feasible production area is described by a AE IGF dC FGIE b. CDGHE e BDGHE co €DGI E 27. The term "constraints" in a linear programming model generally describes (a) the objective function, (b) costs, (¢) scarce resources, (d) dependent variables, (c) inefficiencies. 28. Boaz Co. manufactures two models, medium (X) and large (Y) . The contribution margin expected is P24 for the medium model and P40 for the large model. The ‘medium model and P40 for the large model. ‘The medium model is processed 2 hours in the machining department and 4 hours in the polishing department. The large model is processed 3 hours in the machining department and 6 hours in the polishing department. If total contribution margin is to be maximized, using linear programming, how would the objective function be expressed? a, 24X (2+4) + 40Y 3 46) c. 6X + 9¥ b. 24x + 40Y 5X +10¥ 29, Among its other products, Ammer Company manufactures two model doodads, X and Y. Model X is processed 4 hours in the machining department and 2 hours in the polishing department. Model Y is processed 9 hours’ in the machining department and 6 hours in the polishing department, The available time for processing the wo models is 200 hours a week in the machining department and 180 hours a week in the polishing department. The contribution margins expected are P10 for Model X and P14 for Model Y. 531Chapter 16 - Linear Programming How would the restriction (constraint) for the polishing department be expressed for these two models? a, 2X+6Y 6 180 ¢. 2(10X) + 6(14Y) 6 180 b. 6X+15Y6 180 d. 10X+ 14Y 6 180 30. Referring to. No. 29, how would the constraint for the machining department be expressed? a. 2X +6Y6 180 ©. 4X + 9Y 6 200 b. 6X +15Y 6 200 4. 10X+14Y 6 200 Items 31 and 32 are based on the following . Pleasant Valley Company makes two ‘products, ceramic vases (V) and ceramic bowls (B). Each vase requires 2 pounds of material and 3 hours of labor. Each bowl requires 2 pound of material and 1 hour of labor, During the next production week, there will be 100 pounds of ‘material and 60 hours of labor available to make vases and bowls . Each pound of material costs P4 and each hour of labor costs P10. Alll factory overhead is fixed and is estimated to be P200 for this production process for a week. Pleasant Valley sells vases for P50 each bowls for P35 each. 31. The objective function for Pleasant Valley would be a. Maximize Z =PS0V+P35B d. Maximize Z = P12V + P17B - P200 b. Maximize Z =P12V +P17B _ e. Some function other than those given above c. Maximize Z =P38V +P18B 32. One of the constraints of Pleasant Valley's objective function would be a, 2V+2B6 60 d. V+ 3B 6 100 b. 2V+2B6 P400 ¢, P8V +P8B 6 P600 c. 3V +B 6 POO Tiems 33 through 38 relate to the terminology and techniques used in linear programming and are based on the following information. Linear programming is a mathematical technique that is designed to assist an organization in allocating is resources. A linear programming problems takes the form presented below f= Ay Xi + Ap Xp tere + Ay Xn subject to By X; + By X2+ ee* + By Xn ChChapter 16 - Linear Programming 33. The following functions is referred to as the f= A, Xi + AgXatese + An Xn a. Revenue function _c. Constraint function ¢, Objective function b. Cost function d. Linear function 34. The following function is referred to as the B,X, + By Xp +e+* +Ba Xn Cr a. Variable function c. Linear function e. Objective function 'b, Constraint function d. Slack function 35, In order to solve a linear programming problem, slack, surplus, and artificial variables must be employed. A slack variable represents a, Opportunity costs . The variable with the most negative value b. Unused capacity e. The variable with the greatest profit c. Outside variables with high cost 36. The procedure employed to solve linear programming problems is a. Differential calculus ¢. Simulation ¢. Matrix algebra b. Integral calculus 4. Expected value 37. Shadow prices in linear programming measure the a. Contribution of acquiring an additional. unit of a scare resource b. Contribution of a product c. Cost of the optimum solution d. Profitability associated with the optimum solution ¢. Cost of acquiring an additional unit of a scarce resource 38. Inreality, a shadow price is atype of ‘a. Incremental cost, Artificial cost e, Incremental revenue b. Variable cost 4, Opportunity cost 39. Johnson, Inc, manufactures product X and product Y , which are processed as follows: ‘Type A Machine ‘Type B Machine Product X 6 hours 4 hours Product Y 9 hours S hoursChapter 16 - Linear Programming ‘The contribution margin is P12 for product X and P7 for product Y. The available time daily for processing the two products is 120 hours for machine Type A and 80 hours for machine Type B. How would the restriction (constraint) for machine Type B be expressed? a 4X+ 5Y ©. 6X +9¥ 6120 b. 4X + SY 680 d. 2X +7¥ 40, Referring to No. 39 how would the constraint for machine Type A be expressed? a. 4Z + SY c. 6X+9Y6 120 b. 4X + SY 6 80 a. 12X+7YChapter 16c - Linear Programming (Suggested Answers). 2 ‘Chapter 16c - LINEAR PROGRAMMING (Suggested Answers) } Problems (1-40) i LD Linear programming (LP) is a mathematical technique used to maximize revenue (profit) functions or to minimize cost functions subject to constraints. LP is often used to plan resources allocation. Managers need to:select the most profitable or least costly way to use resources. 2. C The objective function in a LP model symbolically represents the revenues (profits) oF costs being maximized ot minimized, respectively. ‘ 3. B__LPisa technique used to maximize a revenue or profit function, or minimize a cost function, subject to constraints, e.g. limited (scarce) resources or minimum maximum levels: of production, performance, etc. In business, LP is used for planning resource allocations. Managers are often ficed ‘with problems of selecting the most profitable or leat costly way to used available resources. 4A LP jis a technique to maximize a revenue or profit function or minimize a cost function subject to any constraints (e.g. the amount of chemical that can be used per run). 5B LP is a mathematical technique used to maximize revenue/profit or minimize casts. Solving LP problems requires the use of independent variables, dependent variable, constraints, and slack variables, Network diagrams are used to solve optimization problems of a special nature, e.g. applying PERT (Program Evaluation Review Technique), management control method for ‘complex projects. ‘ 6A LP is @ mathematical technique used to maximize revenues/profits of to minithize costs subject to given constraints. The following steps must be taken; (1) establish the basic relationship between the variables and the constraints, Q) identify the feasible alternatives, {G) determine the ebjective function, and (4) solve the equations to find the optimal alternative. 1D ‘A transportation model is a special kind of LP problem in which the costs of receiving supplies ftom several sources are described. The model attempts to minimize costs by allocating the outputs of the supply points to various destinations. - 8. C Refer to the chapter of regression analysis. 9. A ‘The shadow price of a constraint is the amount by oa ‘the contribution margin will increase as a result of relaxing that constraint in an LP model by one unit. ‘The calculation of a shadow price isa simple example of sensitivity analysis, which is a procedure designed to test the responsiveness of an alternative decision or variable to ‘changes or errors in the decision model. The shadow price is essentially an opportunity cost. 10. BLP equations are sometimes stated as inequalities. To solve LP models, slack variables must first be added to the equations to resut in equalities.Chapter 16¢ - Linear Programming (Suggested Answers) nee 2D 13D 1A 1A 16 B a 1B 8 LLP techniques are used to maximize revenues/profits or minimize costs by determining the best allocation of resources, eg. Scheduling, routing, and transportation algorithms. Minimizing cost functions is usually an application of differential calculus because costs usually contain fixed and variable portions. The result is a nonlinear total cost function. ‘The simplex method is a technique most commonly used to solve LP problems. It is an algorithm used to move from a possible solution toa better solution . The mathematical ‘constraint equations are arranged in a matrix of coefficients and manipulated as a group by ‘means of matrix algebra. The simplex method is used primarily with computers. Refer to No. 12. Markoy analysis is used in decision problems in which probability of the ‘occurrertce ofa fiture state depends only on the current state, ‘Monte Carlo technique is used in a simulation to generate random values for a variable. The Matrix given is the final solution of a simplex tableau. The simplex method is the technique most commonly used to solve LP problems. tis an algorithm used to move from 1 possible solution to a better solution. The mathematical constraint equation are arranged in a matrix of coefficients and manipulated as @ group by means of matrix algebra. The simplex method is used primarily with computers. LP problems assume linearity of relationships; the solutions may be examined by plotting a solution region on the graph, The solution region is formed or bounded by the constraint lines. the objective function is also a linear relationship which may also be used on the graph, Thus multiple relationship and multiple constraints may be examined. The graphic solution to a LP problem depicts the area of feasible combinations of activity zziven the constraints, Any point along a constraint line will have the same characteristics: thus a point represents @ line, By moving to.the extreme point of the feasible region, one finds the optimal solution. ‘The line of best fit is found when using the least squares method. ‘An LP graph contains the constraint lines and an objective function line. The combination ‘sraphically depicts what is essentially a feasible space. See the diagram accompanying the next questions. To determine profit maximization point on an LP graph requires the examination of each of the ‘corner points on the feasible space. Contribution margin is First = Zero Units of A & 20 units of B CM = 20units \ Ps B80 Second - 20 units of A & 10 units of B CM =A (20units xP3) P60 B (0 units x Pa) 40 P09 Third - 30units of A & Zero. units of B CM = A GOunits x P3) P90 Forty units of A and zero units of B lie outside thé feasibility space. Thus the revenues for the product mixc at 20 units of A and 10 units of B are maximized ‘The polishing constraint én the graph consists of & fine from 30B to 30A. Thus, the limitation posed by polishiig Is 30A. 30B or some combination of the two. Since A & B both requires hours of polishing. there mast be 60 hours of polishing capacity variable This 2A. 2B o af 873Chapter 16c - Linear Programming (Suggested Answers) 20. B The grinding constraint is a line from 20B to 40A. Thus, if only B is produced, only 20 units can be produced. If only A is produced, 40 units can be produced. Also, note that A requires 2 hours of grinding and B requires 4 hours of grinding. Only 80 hours of grinding capacity are available since, t one end of constraint, only 20 units of B can be produced at 4 hours each. Thus the constraints 2A + 4B 6 80. 21. D. The slope is rise (change in vertical distance) oyer run (change in horizontal distance). AS ‘one follows the polishing constraint line, it decreases by 1 vertically as one moves to the | tight (increases) ally by 1. Thus, the slope is - 1/1. Note that the slope of the ‘constraint and objective functions in LP is usually negative. 22, D Each. of the constraint lines given as answer choices is downward sloping (ie. they ‘connect between Y axis and X axis) except Y 6 40 which, when the inequality is changed to.an equality, is graphically depicted as 4 horizontal line. Given that slope is rise'run, there is no rise (vertical movement) in a horizontal line, so the slope is zero. 23. B The grinding constraint line goes from 20B to 40A, decreasing 1 vertically for every 2 moved horizontally. Accordingly, the slope is - 1/2. 24. C The objective function consists of a series of parallel lines from the origin which have the ‘same profit potential, Since each ‘generates P3 - of CM and each B produce of P4 - UCM, the company would be indifferent between producing 48 & 3B. On this graph, such @ line ‘would run from 30B to 40A.. The rise would be P3 vertically downward from every Pé- horizontal increase, fora slope of 3/4. ‘ 25.°D. Recall from No, 24 that the company should be indifferent between producing 4 A and 3B . which combination ‘can be provided by 40A or 30B. Each combination provides contribution margin of P120 26. B Feasible pfoduction surrounded by the area on the graph gives production possible. Constraints: Machine 1 constraint. Machine 2 constraint, and Product mix constraint, All prevent production from occurring: above their lines. Accordingly, the feasible area of production is { nded by points CD G HE, Ofcourse at point E, the point of origin , there is no production of either X or Y. 27. € LP models are mathematical techniques in which an objective fimction is maximized ot ‘minimized subject to constraints. These constraints must be fully specified before a linear programming probfem can be solved. 28. B The-objective function is the function that is to be maximized or minimized. The UCMs are P24 and P40, respectively, for X and ¥. The function to be maximized is therefore P24 X + P4OY. The processing times are reflected in the constraints, not the objective function. 29. A A constraint equation of a LP problem depicts the constraint of production by fimiting total available hours of other resources, assuming that Those of other resources may be used on cither or both the products. In this ease, 2 polishing hours of X plus 6 polishing hours of Y ‘must be less than or equal to the tots! 180 hours avaifable in the department. 30. C — The constraint equation of an LP problem depicts the constraint of production by limiting hhours or other resources available in total. It assumes that those hours r other Fesources available may be used on either or both the products. In this case, 4 hours of X plus 9 hours of ¥ in the machining department must be less than or equal to the sotal 200 hours available in the department 874Chapter 16c - Linear Programming (Suggested Answers) 31. 32. 33 34, 35, 36. 37, 38, 39. 40. ‘The objective is to maximize CM. Since each bowl requires P8 of materials and P10 of labor, its total variable cost is P18. Given a selling price of P35, the UCM is P17. Each vase requires P8 of materials and P30 of labor, a total variable cost of P38. at P50 selling price, the UCM is P12. Thus, the objective functions to maximize P12V + PI7B. Given 100 pounds of material, the material constraint requires thet 2 pounds per vase plus 2 pounds per bowl be less than or equal to 100. The Iabor constraint is 3 hours per vase plus 1 hour per bowl, which must be less than or equal to 60 hours. E__LP isa mathematical technique used to maximize revenue (profit) functions or to minimize cost functions subject to constraints.’ Here , the function f is the objective fimction. The objective function in a linear programming model symbolically represents the revenue (profits) or costs being maximized or minimized, respectively. ‘The constraint functions are the "subject to" functions; imposed by scarce resources. 4. they state the limits of production ‘A slack variable represents unused capacity. Since LP formulations are often stated as inequalities, there is a possibility to unused capacity even at the optimum production level. To convert inequalities to equalities , slack variables are introduced to account for ‘unused capacity. Matrix algebra is @ method of manipulating multiple linear equations. itis used to solve LP problems (assuming that a computer is not available). ‘The use of matrix algebra to. solve such problems is called simplex method. Refer to No. 9. ‘The term opportunity cost “eer to the benefit foregone because ofthe choive of a Opportunity costs are considered when determining the most profitable utilization of resources. ‘Since shadow price is the contribution that would be provided if one additional unit of @ scarce resource were available, it is essentially the opportunity cost of not adding the additional unit Refer to No. 30. In this case, 4 hours of X on the type B machine plus 5 hours of Y must be less than or equal to 80 hours available for processing these products. [Refer to No. 30. In’ this case, 6 hours of X on type A machine plus 9 hours of ¥ must be less than or equal to the total 120 hours available for processing these products 875