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Case 4: Vision Corporation: Production Planning and Shipping

Vision Corporation produces cameras for military applications in three plants. The problem aims to maximize profits by determining the optimal production and shipping plan. It is formulated as a linear program with decision variables for camera production quantities. The objective is to maximize total revenue minus costs, subject to constraints on available labor hours, machine hours, materials and demand from three clients. The optimal solution provides the production quantities across plants and shipments to each client to maximize profits.

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Jomara Rossell
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© © All Rights Reserved
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286 views

Case 4: Vision Corporation: Production Planning and Shipping

Vision Corporation produces cameras for military applications in three plants. The problem aims to maximize profits by determining the optimal production and shipping plan. It is formulated as a linear program with decision variables for camera production quantities. The objective is to maximize total revenue minus costs, subject to constraints on available labor hours, machine hours, materials and demand from three clients. The optimal solution provides the production quantities across plants and shipments to each client to maximize profits.

Uploaded by

Jomara Rossell
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Case 4:

Vision Corporation:

Production Planning and Shipping

By:

Jomara Celia Rosell Rosales

Álvaro Cusirimay Balderrama

May 2021
Abstract

In this project, we have studied the problem of optimizing using …, by linear programming
method. First, we have formulated this problem as a LP, and then use simplex algorithm to solve
this problem. We also included sensitivity analysis and duality analysis. Our results show that
…..

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1. Problem Description

Vision Corporation is a company that produces video capture devices for military applications.
The company produces four types of cameras that are differentiated by their lens size (small,
medium, large, and precision). The Corporation owns three manufacturing plants in which it can
produce any of the four types of cameras it offers. To produce certain types of cameras, labor
hours, machine hours and several materials measured in pounds are required. Plant 1 has 6000
hours of labor and 10,000 hours of machines available. This plant can produce small chambers
with 3 hours of labor, 8 hours of machinery, and 1 pound of materials. It can also produce
medium cameras with 3 hours of work, 8.5 hours of machines, and 1.1 pounds of material. The
long chambers produced require 4 hours of work, 9 hours of machines, and 1.2 pounds of
material. Precision cameras require 4 hours of labor, 9 hours of machines, and 1.3 pounds of
material.

Retrieved from: Winston L. Operations Reseach, p. 1355

Plant 2 has 5,000 hours of


work and 12,500 hours of machines. The small cameras produced in plant 2 require 3.5 hours of
labor, 7 hours of machines and 1.1 pounds of material. Medium cameras require 3.5 hours of
labor hours, 7 hours of machines, and 1 pound of materials. Long cameras require 4.5 labor
hours, 8 machine hours, and 1.1 pounds of materials. Precision cameras require 4.5 labor hours,
9 machine hours, and 1.4 pounds of materials.

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Retrieved from: Winston L. Operations Reseach, p. 1355

In plant 3 there are 3000 hours


of labor and 6000 hours of machines available. Here you can build a small chamber with 3 hours
of work, 7.5 hours of machines, and 1.1 pounds of material. Medium cameras require 3.5 labor
hours, 7 machine hours, and 1.1 pounds of materials. On the other hand, long cameras require 4
hours of labor, 8.5 hours of machines and 1.3 pounds of materials. Finally, a precision camera
needs 4.5 hours of labor, 8.5 hours of machines and 1.3 pounds of material. Consider that the
materials to make the chambers are shared by the three-story system. Thus, 3,500 pounds of
materials are available for the three plants.

Retrieved from: Winston L. Operations Reseach, p. 1355

Corporación Visión has contracts with three clients: RAYco, HONco and MMco. According to
its contract, RAYco can only purchase a maximum of 200 small cameras at $ 17 per camera, 300
medium cameras at $ 18 per camera, 500 long cameras at $ 22 per camera and 200 precision
cameras at $ 29 each. Second, the HONco contract allows you to get 400 small cameras at $ 16
each, 300 medium cameras at $ 18 each, 200 long cameras at $ 22 each, and 400 precision

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cameras at $ 26 each. Third, the MMco contract allows for 200 cameras at $ 16 each, 400
medium cameras at $ 17 each, 300 long cameras at $ 23 each, and 300 precision cameras at $ 27
per camera.

Retrieved from: Winston L. Operations Reseach, p. 1355

Shipping costs from plant 1 are $ 1 to RAYco facilities, $ 1.6 to HONco facilities and $ 1.1 to
MMco facilities. From floor 2 it costs $ 1.2 to send a camera to RAYco, $ 1.5 to HONco and $ 1
to MMco. From floor 3 it costs $ 1.4 to send a camera to RAYco, $ 1.5 to HONco and $ 1.3 to
MMco.

Retrieved from: Winston L. Operations Reseach, p. 1355

The production costs at Plant 1 are: $ 14 for small cameras, $ 16 for medium cameras, $ 18 for
long cameras, and $ 26 for precision cameras. In the case of the plant, it costs $ 13 to produce a
small camera, $ 17 to produce a medium camera, $ 20 to produce a long camera, and $ 24 to

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produce a precision camera. In Plant 3, each small camera produced costs $ 14, each medium
camera produced costs $ 15, each long camera produced costs $ 19, and each precision camera
produced costs $ 23. You are asked to develop a production plan that maximizes the profits of
the company Vision Corporation. Prepare a shipping plan that minimizes shipping costs to each
client of Corporation Vision.

Retrieved from: Winston L. Operations Reseach, p. 1355

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2. Modeling and Formulation of the Problem

In this section, you need to follow 5 steps to finally get a LP formulation for your problem.

2.1 Problem data


2.2 Decision variables
2.3 Objective function
2.4 Constraint
2.5 The whole optimization model

3. Solving the Problem

Please put your steps how to solve this problem in some software. The code should be put as
Appendix at the end of the project.

4. Results and Analysis

Explain the results you obtain from Section 3, and give the optimal decision proposed in the
original problem. – a graph or table will be very helpful.

5. Sensitivity Analysis and Duality

Show your sensitivity analysis and dual of this problem;

Requirements of sensitivity and duality analysis:


(1) Sensitivity analysis: change at least two coefficients in your objective function, and carefully
explain their corresponding economic interpretations;
(2) Change at least two RHS parameters, and do sensitivity analysis to check their changing
interval, in which current basis remains optimal;
(3) Find the dual of your LP formulation (if your problem have more than 5 variables or 5
constraints, you do not need to write the dual), and study the shadow prices for at least two RHS

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parameters based on (2) and also explain their corresponding economic interpretations (shadow
price information obtained from LINDO or Excel);
(4) Please add your code in the final project (excel: copy your input screen, and results screen).

If your problem is formulated as integer program, you are required to write the dual; but some
analysis on change if parameters could be analyzed (for example, resolve the whole problem to
see the difference between two solutions).

6. Conclusions

Show the contributions and future directions of this problem. Two paragraphs will be good.

References:
[1] W.L. Winston, M. Venkataramanan, Introduction to Mathematical Programming, 4 th
edition, Publisher: Duxbury Press, 2003.

Please put more references here if you have.

Appendix:

You may use this part to include your code for section 3. Or the steps how you collect the data
for your problem.

One paragraph on each team member’s efforts working on this project.

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