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Operations Research

This document contains Lalit Laxman Sapkale's answers to an assignment with multiple questions. Q1 involves solving a linear programming problem with 4 constraints and providing the optimal solution, value of the objective function, slack values, and shadow prices. Q2 examines changing aspects of another linear programming problem, such as the effect of increasing an annual income requirement or risk measure. Q3 presents the dual problem to one given, shows the solver output, and uses dual variables to identify the machine operating at maximum capacity. The dual solution can find the primal solution.

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Lalit Sapkale
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43 views7 pages

Operations Research

This document contains Lalit Laxman Sapkale's answers to an assignment with multiple questions. Q1 involves solving a linear programming problem with 4 constraints and providing the optimal solution, value of the objective function, slack values, and shadow prices. Q2 examines changing aspects of another linear programming problem, such as the effect of increasing an annual income requirement or risk measure. Q3 presents the dual problem to one given, shows the solver output, and uses dual variables to identify the machine operating at maximum capacity. The dual solution can find the primal solution.

Uploaded by

Lalit Sapkale
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Sapkale Lalit Laxman Assignment No.

1
PGP/1348/06

Q1.

A) Tableau Form

Basic
Eq. Z X1 X2 X3 S1 S2 S3 Right
Variabl
Side
e
Z (0) 1 -15 -30 -20 0 0 0 0
S1 (1) 0 1 0 1 1 0 0 4
S2 (2) 0 0.5 2 1 0 1 0 3
S3 (3) 0 1 1 2 0 0 1 6

B) Optimal solution
Sapkale Lalit Laxman Assignment No. 1
PGP/1348/06

Decision variables: X1= 4

X2= 0.5

X3=0

Slack Variable: S1=0, S2=0, S3=1.5

C) value of the objective function

Max 15𝑥1 + 30𝑥2 + 20𝑥3 =75

D) Slack for Nonbinding constraints

Nonbinding Constraint- 1𝑥1 + 1𝑥2 + 2𝑥3 ≤ 6

Slack Value = 6-4.5= 1.5

E) Shadow price associated with the three constraints

Constraints Shadow Price


1𝑥1 + 1𝑥3 ≤ 4 7.5

0.5𝑥1 + 2𝑥2 + 1𝑥3 ≤ 3 15

1𝑥1 + 1𝑥2 + 2𝑥3 ≤ 6 0

Right-hand-side value that would have the greatest effect on the value of the objective function if it
could be changed is 3 since its shadow price is 15.

Q2.

A) effect of increasing the annual income requirement have on the riskiness of the portfolio
2.16667 increase in optimal solution.

B) Range of feasibility for b2 (RHS for second constraint).


Range 120000(60000+60000) to 57000(60000 – 3000)

C) The optimal solution and its value when the annual income requirement is increased
from $60,000 to $65,000.
72833.35 (62000 + 10833.35)

D) The optimal solution and its value change when the risk measure for the stock fund is
increased from 8 to 9.
9 * 4000 + 3 * 10000 = 66000
Sapkale Lalit Laxman Assignment No. 1
PGP/1348/06

Q3.

A) Dual To the given Problem:


Min 550Y1+700Y2+200Y3
s.t.
1.5Y1+4Y2+2Y3 ≥ 4
2Y1+Y2+3Y3 ≥6
4Y1+2Y2+Y3 ≥3
3Y1+Y2+2Y3 ≥1

B)

i) Area where the decision variables, the objective function and the constraints are set up.
Sapkale Lalit Laxman Assignment No. 1
PGP/1348/06

i) The Solver Add-in after adding all requisite details in it.


Sapkale Lalit Laxman Assignment No. 1
PGP/1348/06

iii) Answer Report

Microsoft Excel 16.0 Answer Report


Worksheet: [Book1] Sheet2
Report Created: 01-12-2020 21:27:54
Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
Solver Engine
Engine: Simplex LP
Solution Time: 0.047 Seconds.
Iterations: 5 Subproblems: 0
Solver Options
Max Time Unlimited, Iterations Unlimited, Precision 0.000001
Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative

Objective Cell (Min)


Nam Original Final
Cell e Value Value
$S$
3 DV 525 525

Variable Cells
Nam Original Final Intege
Cell e Value Value r
$P$
2 0.3 0.3 Contin
$Q$2 0 0 Contin
$R$
2 1.8 1.8 Contin

Constraints
Nam Cell Slac
Cell e Value Formula Status k
Not
$S$ Const $S$5>=$U Bindin
5 r. 4.05 $5 g 0.05
$S$ $S$6>=$U Bindin
6 6 $6 g 0
$S$ $S$7>=$U Bindin
7 3 $7 g 0
Not
$S$ $S$8>=$U Bindin
8 4.5 $8 g 3.5
Sapkale Lalit Laxman Assignment No. 1
PGP/1348/06

vi) Sensitivity Report

Microsoft Excel 16.0 Sensitivity Report


Worksheet: [Book1] Sheet2
Report Created: 01-12-2020 21:22:09

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$P$2 0.3 0 550 250 416.6666667
$Q$2 0 425 700 1E+30 425
$R$2 1.8 0 200 625 62.5

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$S$5 Constr. 4.05 0 4 0.05 1E+30
$S$6 6 25 6 3 0.076923077
$S$7 3 125 3 9 1
$S$8 4.5 0 1 3.5 1E+30

C) Dual solution to find the solution of profit-maximizing product mix primal problem.

Since the optimal value of Primal and Dual remains the same, the solution of profit maximizing
product mix primal problem is 525.

D) Dual variables to identify the machine or machines that are producing at maximum
capacity.

1.5𝑥1 + 2𝑥2 + 4𝑥3 + 3𝑥4 ≤ 550 Machine A 4𝑥1


+ 1𝑥2 + 2𝑥3 + 1𝑥4 ≤ 700 Machine B 2𝑥1
+ 3𝑥2 + 1𝑥3 + 2𝑥4 ≤ 200 Machine C
Sapkale Lalit Laxman Assignment No. 1
PGP/1348/06

Using the shadow price of Dual problem in the Primal function as the value of Decision Variables
X1, X2, X3 and X4.
X1= 0, X2= 25, X3=125, X4= 0

1.5*0 + 2*25 + 4*125 + 3*0 = 550


4*0 + 1*25 + 2*125 + 1*0 = 275
2*0 + 3*25 + 1*125 + 2*0 = 200

Constraint for Machine b hour’s resources has excess capacity. The excess capacity is 700-275 =
425,

If the manager can select one machine for additional production capacity, he must
select Machine C.
The values of Decision variables of Dual problem Y1, Y2, and Y3 is same as the Shadow
price of Primal function.
We get to know that,
Material resources used is the most valuable resource as their contribution to the objective
function is 1.8 per unit. This is greater than 0.3 or 0 per unit.

Since the shadow price which measures the marginal value of resource is greatest
for Machine C (1.8), manager should select Machine C.

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