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IE 317 Case Study 4: Bsie Ii Group 7

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583 views37 pages

IE 317 Case Study 4: Bsie Ii Group 7

OR

Uploaded by

Chel Armenton
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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IE 317

LECTURE 4
CASE STUDY 4

BSIE II
Group 7

Abatayo, Sarah Jane


Amistad, Joseph Jr.
Armenton, Exchel
Jordan, Michelle
Lesaca, Jane Cresthyl

August 2021
2

I. Summer Sports Camp at State University


A. Introduction
During these times, we all need activity and enrichment, especially children, and that's hard
to come by during the COVID-19 pandemic. But with restrictions easing into the green phase,
summer day camps are now able to open and welcome attendees for the season. A summer camp
is a youth development organization, supervised by professional adults, that strives to foster
personal growth for children by providing them fun, safe educational/recreational programs,
outdoor experiences and group activities while away from home during the summer months. Not
only do sport camps directly improve health through exercise, but it also teaches kids to exercise
and stay active. With childhood obesity at an all-time high, it's essential to give kids an alternative
to staying inside spending long hours online or in front of the TV. The primary purpose of summer
athletic camps is to immerse kids in specific skill developments for their chosen sport. It can be a
fun time for beginners who will learn basic skills and determine if they want to pursue the game.
If they do, they will have a foundation to carry them forward. Sports camps are also an excellent
refresher of abilities during the long summer break for more advanced players.
During the summer, Mary Kelly a scholarship soccer player works at a youth all sports
camp. The sports camp runs for 8 weeks during July ans August and campers come for a 1-week
period. She serves as one of the camp soccer instructors and and also been placed to in charge of
arranging for sheets beds of the campers. She has been instructed to develop a plan for purchasing
and cleaning sheets each week of camp at the lowest possible cost. The campers will use the clean
sheets from the beginning of the week and at the end bof the week the sheets will place by the
campers in large bins. Mary must arrange either to purchase new sheets or to clean the old sheets.

B. Discussion
This is a case of integer programming because the sheets can’t take fractional values.
Decide the decision variables:
Let,
A= number of sheets purchased in week
B= number of sheets from laundry that will join the week
C= number of sheets from friends that will join the week

Formulate the objective function; the objective is to minimize the cost.


Minimize Z = 10(A1+A2+A3+A4+A5+A6+A7+A8) + 4(B3+B4+B5+B6+B7+B8) +
2(C4+C5+C6+C7+C8)
3

Formulate the constraints,


Note-1: Due to lead time of 1 week, the sheets given to the laundry at the end of week-1 will satisfy
the demand of week-3.
Note-2: Due to lead time of 2 week, the sheets given to the friends for washing at the end of week-
1 will satisfy the demand of week-4.
Note-3: There will be 20% return for each sheet washed.
Subject to:
A1 >= 115
A2>= 210
A3 + 0.8B3>= 250
A4 + 0.8B4 + 0.8C4 >=230
A5 + 0.8B5 + 0.8C5 >= 260
A6 + 0.8B6 + 0.8C6 >= 300
A7+ 0.8B7 + 0.8C7 >= 250
A8 + 0.8B8 + 0.8C8 >= 190
A,B,C >= 0

Now, create constraints for the number of sheets that can be given for washing:
B3 + C4 <= A1
B4 + C5 <= A2
B5 + C6 <= A3
B6 + C7 <= A4
B7 + C8<= A5
B8 <= A6
4

Solve the model using Excel solver as shown below:

Exhibit 1. Excel Spreadsheets


Step-2: Go to Data, add the constraints requisite values and click ‘Solver’ as shown below:

Exhibit 2. Solver Parameter


5

Step-3: Go to the options menu and decrease the constraint precision to the value shown in the
screenshot shown below:

Exhibit 2.1. Options Menu to increase/decrease the constraint precision


Step-4: Click on “OK” and then on “Solve” to generate the results:

Exhibit 3.Excel Results


The plan for purchase is shown in the table.
6

B.1 Documentation

C. Conclusion
The result on the table shows the plan for purchasing and cleaning the sheets. Total
numbers of purchase, sheets from laundry and sheets from friend that will join in 8 weeks will be
1047, 219 and 733 respectively. It will provide Mary a minimum cost of $12,812. The largest
purchase is 197 sheets in week 4 and the largest numbers of sheets from friends that will join the
week will be 210 in week 5, since before week 5 it will purchase the highest number of sheets.
The highest number of Laundry is at the last week which is good to serve its purpose.
D. References
• W. Taylor III. Introduction to Management Science, 12th edition, ISBN 978-0-13-
377884-7. Published by Pearson Education © 2016.
• https://www.spookynooksports.com/blog/manheim/advantages-summer-
camps?fbclid=IwAR3grFzTbw4tGnO-
zxsL3ZKyW1EB7zii4bXLWujpBZrWhyTHliVkbWQj-NM
7

II. Spring Garden Tools


A. Introduction
Garden tool is any one of many tools made for gardens and gardening and extend over a
range of tools made for agriculture and horticulture. It can also be hand tools and power tools.
Having the right tools means all the difference in maintaining a healthy, attractive garden. The
working end of this tool is usually made of metal. Some hand tools are made entirely of a single
piece of metal. The best metal for tools is polished stainless steel, which is very hard and resists
rust. There are certain stages of process in making this tool. In connection with this, The Spring
family who owned and operated a garden tool wants to establish a production schedule in their
four most popular small garden tools, namely trowel, a hoe, a rake, and a shovel.
In this problem, the researchers utilize Total Integer Linear Programming Model which
requires all decision variables to have integer solution values.
B. Discussion
The Spring family four most popular small garden tools production has a manufacturing
process that encompasses two stages. The first stage includes two operations—stamping out the
metal tool heads and drilling screw holes in them. The completed tool heads then flow to the second
stage, which includes an assembly operation where the handles are attached to the tool heads, a
finishing step, and packaging. The processing times per tool for each operation are provided in the
following table:

STAGE 1 STAGE 2
Regular Cost Overtime Cost Regular Cost Overtime Cost

Trowel $ $ $ $
6.00 6.20 3.00 3.10
Hoe 10.00 10.70 5.00 5.40
Rake 8.00 6.50 4.00 4.30
Shovel 10.00 10.70 5.00 5.40
Table 1
The company has 10,000 square feet of sheet steel available each month. The metal
required for each tool and the monthly contracted production volume per tool are provided in the
table:
Sheet Metal (ft.^2) Monthly Contracted Sales
Trowel 1.2 1800
Hoe 1.6 1400
Rake 2.1 1600
Shovel 2.4 1800

Table 2
8

The company have available 100 hours per both operations. The regular production and
overtime costs per tool for both stages are provided in the following table:

Tool (hr./unit) Total Hours


OPERATIONS Trowel Hoe Rake Shovel Available per
Month
Stamping 0.04 0.17 0.06 0.12 500
Drilling 0.05 0.14 0.14 400
Assembly 0.06 0.13 0.05 0.1 600
Finishing 0.05 0.21 0.02 0.1 550
Packaging 0.03 0.15 0.04 0.15 500

Table 3
The Spring Company feels comfortable subcontracting the first-stage operations because
it is easier to detect defects prior to assembly and finishing. For the same reason, the company will
not subcontract for the entire tool because defects would be particularly hard to detect after the
tool was finished and packaged. The cost of subcontracting in stage 1 adds 20% to the regular
production cost.
The Spring Company wants to establish a production schedule for regular and overtime
production in each stage and for the number of tool heads subcontracted, at the minimum cost.
Formulate a linear programming model for this problem and solve the model using the computer.
Which resources appear to be most critical in the production process?

Formulating the linear programming model and solve it using the computer.
Decision Variables:
i = tool Trowel (1), tool Hoe (2), tool Rake (3), and tool Shovel (4)
Let
Xi = Regular production of tool i in stage 1
Yi = Subcontracted production of tool i in stage 1
Oi = Overtime production of tool i in stage 1
Ai = Regular production of tool i in stage 2
Bi = Overtime production of tool i in stage 2
9

Objective function is to minimize the cost:


Minimize Z =6X1 + 10X2 + 8X3 + 10X4 + 7.2Y1 + 12Y2 + 9.6Y3 + 12Y4 + 6.2O1 + 10.7O1
+ 8.5O2 + 10.7O3 + 3A1 + 5A2 + 4A3 + 5A4 + 3.1B1 + 5.4B2 + 4.3B3 + 5.4B4

Model Constraints

0.04X1 + 0.17X2 + 0.06X3 + 0.12X4 <= 500 Stamping available processing time
0.05X1 + 0.14X2 + + 0.14X4 <= 400 Drilling available processing time
0.04O1 + 0.17O2 + 0.06O3 + 0.12O4<= 100 Stamping available hour for overtime
0.05O1 + 0.14O2 + 0.14O4 2.4X4<= 100 Drilling available hour for overtime
0.06A1 + 0.13A2 + 0.05A3 + 0.10A4 <= 600 Assembly available processing time
0.05A1 + 0.21A2 + 0.02A3 + 0.10A4 <= 550 Finishing available processing time
0.03A1 + 0.15A2 + 0.04A3 + 0.15A4 <= 500 Packaging available processing time
0.06O1 + 0.13O2 + 0.05O3 + 0.10O4 <= 100 Assembly available hour for overtime
0.05O1 + 0.21O2 + 0.02O3 + 0.10O4 <= 100 Finishing available hour for overtime
0.03O1 + 0.15O2 + 0.04O3 + 0.15O4 <= 100 Packaging available hour for overtime

1.2X1 + 1.6X2 + 2.1X3 + 2.4X4 + 1.2O1 +1.6O2 + 2.1O3 + 2.4O4 <= 10,000 Sheet Steal
Availability
A1 + B1 = 1800 Contracted Sales
A2 + B2 = 1400
A3 + B3 = 1600
A4 + B4 = 1800

Xi, Yi, Oi, Ai, Bi >= 0 non-negativity constraints and integer


10

The Model
Minimize Z =6X1 + 10X2 + 8X3 + 10X4 + 7.2Y1 + 12Y2 + 9.6Y3 + 12Y4 + 6.2O1 + 10.7O1
+ 8.5O2 + 10.7O3 + 3A1 + 5A2 + 4A3 + 5A4 + 3.1B1 + 5.4B2 + 4.3B3 + 5.4B
Subject to
0.04X1 + 0.17X2 + 0.06X3 + 0.12X4 <= 500
0.05X1 + 0.14X2 + + 0.14X4 <= 400
0.04O1 + 0.17O2 + 0.06O3 + 0.12O4<= 100
0.05O1 + 0.14O2 + 0.14O4 2.4X4<= 100
0.06A1 + 0.13A2 + 0.05A3 + 0.10A4 <= 600
0.05A1 + 0.21A2 + 0.02A3 + 0.10A4 <= 550
0.03A1 + 0.15A2 + 0.04A3 + 0.15A4 <= 500
0.06O1 + 0.13O2 + 0.05O3 + 0.10O4 <= 100
0.05O1 + 0.21O2 + 0.02O3 + 0.10O4 <= 100
0.03O1 + 0.15O2 + 0.04O3 + 0.15O4 <= 100
1.2X1 + 1.6X2 + 2.1X3 + 2.4X4 + 1.2O1 +1.6O2 + 2.1O3 + 2.4O4 <= 10,000
A1 + B1 = 1800
A2 + B2 = 1400
A3 + B3 = 1600
A4 + B4 = 1800
Xi, Yi, Oi, Ai, Bi >= 0 and integer
The researcher uses Excel Solver Solution. Enter the values in the excel sheet as shown below:

Exhibit 1. Excel Spreadsheet (1)


11

Exhibit 2. Excel Spreadsheet (2)

Access the solver from the 'data-solver' menu as shown below:

Exhibit 3. Data-Solver Menu


12

Enter the values and constraints in the solver as shown below:

Exhibit 4. Solver Parameters

Total cost is equals to $85,473.70 as shown below:

Exhibit 5. Excel Results (1)

The subcontracted Tool Hoe (Y2) is equal to 1. It maybe not realistic to subcontract only
1 tool Hoe especially for a month. The researcher did some manipulation through trial and error
13

on the data in order to make a new assumption that will make subcontracted Tool H (Y2) equal to
0.

Exhibit 6. Excel Results (2)

These are the new constraints:


Let
Y2 = 0
Y3 = 0
And
X2 = 1317
These 3 assumptions satisfy all constraints and provide a better optimal integer solution to the
model.
14

Completing the new Linear Programming Model


The Model
Minimize Z =6X1 + 10X2 + 8X3 + 10X4 + 7.2Y1 + 12Y2 + 9.6Y3 + 12Y4 + 6.2O1 + 10.7O1
+ 8.5O2 + 10.7O3 + 3A1 + 5A2 + 4A3 + 5A4 + 3.1B1 + 5.4B2 + 4.3B3 + 5.4B

Subject to
0.04X1 + 0.17X2 + 0.06X3 + 0.12X4 <= 500
0.05X1 + 0.14X2 + + 0.14X4 <= 400
0.04O1 + 0.17O2 + 0.06O3 + 0.12O4<= 100
0.05O1 + 0.14O2 + 0.14O4 2.4X4<= 100
0.06A1 + 0.13A2 + 0.05A3 + 0.10A4 <= 600
0.05A1 + 0.21A2 + 0.02A3 + 0.10A4 <= 550
0.03A1 + 0.15A2 + 0.04A3 + 0.15A4 <= 500
0.06O1 + 0.13O2 + 0.05O3 + 0.10O4 <= 100
0.05O1 + 0.21O2 + 0.02O3 + 0.10O4 <= 100
0.03O1 + 0.15O2 + 0.04O3 + 0.15O4 <= 100
1.2X1 + 1.6X2 + 2.1X3 + 2.4X4 + 1.2O1 +1.6O2 + 2.1O3 + 2.4O4 <= 10,000
A1 + B1 = 1800
A2 + B2 = 1400
A3 + B3 = 1600
A4 + B4 = 1800
X2 = 1318
Y2 = 0
O4 = 0
Xi, Yi, Oi, Ai, Bi >= 0 and integer

Add the 3 values of new constraints in the solver as shown below:


15

Exhibit 7. Solver Parameters

Total cost is equals to $85,473.70 as shown below:

Exhibit 8. Excel Results (1)


16

Exhibit 9. Excel Results (2)

Final results: STAGE 1


X1= 1700 X2= 1318 X3 =1600 X4= 932 Regular
Y4= 867 Subcontracted
O1= 100 O2= 82 O4= 1 Overtime

STAGE 2
A1= 1800 A2= 1400 A3= 1600 A4=1146 Regular
B4= 654 Overtime
17

Which resources appear to be the most critical in the production process?

Exhibit 10. Sensitivity Results


From the above figure, it is clear that the shadow price of tool S is $17.4. It indicates that
Tool H appears to be the most critical resource to increase profit and production process.
18

B.1 Documentation

C. Conclusion
The Company must consider Exhibit 8. Excel Results (1) as production schedule for regular
and overtime production in each stage and for the number of tool heads subcontracted, at the
minimum cost for the month. The total minimum cost if the Spring family would consider the
best alternative researchers made will be $85,473.7. In this case, we learned that you can make
assumptions depends on how you understand and analyze the problem. Integer Linear
Programming Model has 3 basic types- a total integer model, 0-1 integer model, and a mixed
integer model. We applied total integer model since all the products(decision variables) are non-
integers that needs to be analyze and understand practically to provide realistic optimal solutions.

D. References
• W. Taylor III. Introduction to Management Science, 12th edition, ISBN 978-0-13-
377884-7. Published by Pearson Education © 2016.
19

III. Susan Wang’s Personal Budgeting Model


A. Introduction
Cash budget is a inputs and outputs of a business or a individual over a long period of time
(e-conomic, 2013). It usually expressed it as numbers of cash budgeting. Its main objective is to
ensure that cash is sufficient for the purpose of capital or revenues expenditure. It is also to have
cash in advanced in the case of shortage of funds (Fundamentals of financial management, pg32).
Having a cash budget is a important factor as it allows the company to have targets sales, minimize
the loss in a company and to earn maximum revenues.

Optimization techniques have been used in this study to obtain an optimal investment in a
selected data that gives maximum returns with minimal inputs. Sensitivity analysis is done to
ascertain the robustness of the resulting model towards the changes in input parameters to
determine a redundant constraint using linear programming.

Linear programming (LP) is an optimization methodology which is multi-variable having


single objective. Linear programming involves solving linear problems and providing optimized
solution based on the applicable constraints.

B. Discussion
The Susan Wong case refers to a maximization problem where both cash and short-term
investments should be handled in order to maximize interest returns, the earned interests from
investments, while ensuring funds are enough and available to meet Susan’s monthly expenses.
The purpose is making short-term investments (for 1, 3 and 7 months periods)and getting the
highest return possible. This problem is faced by a linear programming in Microsoft Excel through
Solver tool. Variables in this problem are the amounts to be invested in the three different options
and so the cash available for each month to meet Susan’s bills. Constrain of this problem I stated
by the monthly cash available to equalize the monthly bills, thus the remaining in flow can be
invested in the corresponding monthly and so generate interest returns

Formulate the Linear programming model for SW to maximize returns and reinvest the
money in the long-term investment programs by following the steps mentioned below:
20

➢ Step-1: Calculate the interest rate for investment period of 1, 3 and 7 months using the nominal
interest rates as shown below:

Nominal interest rate


Interest raten−month = × Investment period
12
0.06
Interest rate1−month = × 1 = 0.005
12
0.08
Interest rate3−month = × 3 = 0.02
12
0.12
Interest rate7−month = × 7 = 0.07
12

➢ Step 2: Formulate the equations as per the monthly cash available as shown below:

maximize z = 0.005(𝑥𝑗1 + 𝑥𝑓1 + 𝑥𝑚1 + 𝑥𝑎1 + 𝑥𝑚𝑎1 + 𝑥𝑗𝑢1 + 𝑥𝑗𝑙1 + 𝑥𝑎𝑢1 + 𝑥𝑠1 + 𝑥𝑜1 + 𝑥𝑛1
+ 𝑥𝑑𝑙 ) + 0.02(𝑥𝑗3 + 𝑥𝑓3 + 𝑥𝑚3 + 𝑥𝑎3 + 𝑥𝑚𝑎3 + 𝑥𝑗𝑢3 + 𝑥𝑗𝑙3 + 𝑥𝑎𝑢3 + 𝑥𝑠3 + 𝑥𝑜3
+ 𝑥𝑛3 + 𝑥𝑑3 ) + 0.07(𝑥𝑗7 + 𝑥𝑓7 + 𝑥𝑚7 + 𝑥𝑎7 + 𝑥𝑚𝑎7 + 𝑥𝑗𝑢7 + 𝑥𝑗𝑙7 + 𝑥𝑎𝑢7 + 𝑥𝑠7
+ 𝑥𝑜7 + 𝑥𝑛7 + 𝑥𝑑7 )
Subject to,
2450 + 3800 − 𝑥𝑗1 − 𝑥𝑗3 − 𝑥𝑗7 = 2750

𝑥𝑗1 − 𝑥𝑓1 − 𝑥𝑓3 − 𝑥𝑓7 + 2450 = 2860

𝑥𝑓1 − 𝑥𝑚1 + 𝑥𝑚3 + 𝑥𝑚7 + 2450 = 2335

𝑥𝑚1 + 𝑥𝑗3 − 𝑥𝑎1 − 𝑥𝑎3 − 𝑥𝑎7 + 2450 = 2120

𝑥𝑎1 + 𝑥𝑓3 − 𝑥𝑚𝑎1 − 𝑥𝑚𝑎3 − 𝑥𝑚𝑎7 + 2450 =1205

𝑥𝑚𝑎1 + 𝑥𝑚3 − 𝑥𝑗𝑢1 − 𝑥𝑗𝑢3 − 𝑥𝑗𝑢7 + 2450 =1600

𝑥𝑗𝑢1 + 𝑥𝑎3 − 𝑥𝑗𝑙1 − 𝑥𝑗𝑙3 − 𝑥𝑗𝑙7 + 2450 =3050

𝑥𝑗𝑙1 + 𝑥𝑚𝑎3 + 𝑥𝑗7 − 𝑥𝑎𝑢1 − 𝑥𝑎𝑢3 − 𝑥𝑎𝑢7 + 2450 =2300

𝑥𝑎𝑢1 + 𝑥𝑗𝑢3 + 𝑥𝑗𝑢3 − 𝑥𝑠1 − 𝑥𝑠3 − 𝑥𝑠7 + 2450 =1975

𝑥𝑠1 + 𝑥𝑗𝑙3 + 𝑥𝑚7 − 𝑥𝑜1 − 𝑥𝑜3 − 𝑥𝑜7 + 2450 =1670

𝑥𝑜1 + 𝑥𝑎𝑢3 + 𝑥𝑎7 − 𝑥𝑛1 − 𝑥𝑛3 − 𝑥𝑛7 + 2450 =2710


𝑥𝑛1 + 𝑥𝑠3 + 𝑥𝑚𝑎7 − 𝑥𝑑1 − 𝑥𝑑2 − 𝑥𝑑7 + 2450 =2980
21

Here,
𝑥𝑖𝑗 = 𝑎𝑚𝑜𝑢𝑛𝑡 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑑 𝑖𝑛 𝑡ℎ𝑒 𝑚𝑜𝑛𝑡ℎ 𝑖 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑟𝑒𝑠𝑝𝑒𝑐𝑡𝑒𝑑 𝑝𝑒𝑟𝑖𝑜𝑑

i = months i. e (january, february, march, . . . . . . december)


j = 1,37 monthly investment program

➢ Step 3: Enter the data in Excel sheet as shown below:

Exhibit 1. Excel Spreadsheet


➢ Step-4: Enter the constraints in the Solver as shown below:

Exhibit 2. Solver Parameters


22

Step-5: Click on solve to generate the results

Exhibit 3. Excel Results

➢ Step-6: Interpret the solution Thus each month the amount that needs to be reinvested for the
maximum return of $844.60 is as follows:

Exhibit 3.1 Solution


23

Using sensitivity analysis for the January constraint, the lower range for the right-hand side is –
410. Thus, Susan needs $710 out of her original $3,800 to make the model feasible.

B.1 Documentation

C. Conclusion
This study investigates the level of investment in short-term investments and the cash
available for each month meeting Susan’s bills that gives maximum returns of $844.60 using linear
programming. Sensitive analysis to ascertain the robustness of the resulting model towards the
changes in input parameters determining the lower range for the constraint of January which is -
410 and Susan needs $710 out of her original money to make the model feasible.

D. References
⚫ N. K. Oladejo, A. Abolarinwa, S. O. Salawu, "Linear Programming and Its Application
Techniques in Optimizing Portfolio Selection of a Firm", Journal of Applied
Mathematics, vol. 2020, Article
ID 8817909, 7 pages, 2020. https://doi.org/10.1155/2020/8817909

⚫ https://www.studymode.com/essays/Susan-Wong%27s-Budget-63692005.html
24

IV. Walsh’s Juice Company


A. Introduction
Unprocessed grape juice is unpasteurized juice from grapes. This means that these juices
have not undergo any partial sterilization at a certain temperature and for a period of exposure that
destroys organisms or bacteria that may cause harm to people that would drink it. One of reasons
why grape juice are being processed is to make wine from them. In connection with this, Walsh’s
Juice Company produces three products from unprocessed grape juice namely, bottled juice,
frozen juice concentrate, and jelly. The company purchases grape juice from three vineyards near
the Great Lakes which is New York, Pennsylvania and Ohio. The juice is then transported to four
different plants in Virginia, Michigan, Tennessee, and Indiana, where it is being processed into
bottled grape juice, frozen juice concentrate, and jelly.
Walsh’s Juice Company wants to determine how many tons of grape juice to ship from
each of the vineyards to each of the plants and the number of tons of each product to process at
each plant that will minimize the total costs, including the cost of transporting grape juice from
the vineyards to the plants and the product processing costs. This problem will be solved by
formulating a linear programming model and solve it by using the computer.

B. Discussion
In a particular month, Walsh’s Juice Company vineyard in New York has 1,400 tons of
unprocessed grape juice is available, 1,700 tons is available in Ohio and 1,100 tons is available in
Pennsylvania. The processing capacity per month is 1,200 tons of unprocessed juice at the plant in
Virginia, 1,100 tons of juice at the plant in Michigan, 1,400 tons at the plant in Tennessee, and
1,400 tons at the plant in Indiana.
The company needs to process a total of 1,200 tons of bottled juice, 900 tons of frozen
concentrate, and 700 tons of jelly at the four plants combined. To process 1 ton of bottled juice, it
requires 1 ton of unprocessed juice; 1 ton of frozen concentrate, it requires 2 tons of unprocessed
juice, and 1 ton of jelly requires 1.5 tons of unprocessed juice.
The tables below show the transportation cost and production cost of unprocessed grape
juice of the Walsh’s Juice Company.
Vineyard Plant
Virginia Michigan Tennessee Indiana
New York $ 850 $ 720 $ 910 $ 750
Pennsylvania 970 790 1,050 880
Ohio 900 830 780 820

Table 1. The cost per ton of transporting unprocessed juice from the vineyards to the
plant.
25

Vineyard Plant
Virginia Michigan Tennessee Indiana
Juice $ 2,100 $ 2,350 $ 2,200 $ 1,900
Concentrate 4,100 4,300 3,950 3,900
Jelly 2,600 2,300 2,500 2,800
Table 2. The cost of processing each product at each plant.

A Linear Programming Model will be formulated for this problem of Walsh’s Juice
Company and a computer solution using Microsoft Excel will be used to solve this problem.

Decision Variables:
𝑥𝑖𝑗 = number of tons of unprocessed grape juice transported from vineyard to plants

where i = n (New York), p (Pennsylvania) and o (Ohio)


j = v (Virginia), m (Michigan), t (Tennessee) and i (Indiana)
𝑦𝑖𝑗 = number of tons of grape juice processed into product in different plants

where i = j (Juice), c (Concentrate) and j1 (Jelly)


j = v (Virginia), m (Michigan), t (Tennessee) and i (Indiana)

Objective Function:
Minimize Z = (Transportation cost) + (Production cost)

= ($850𝑥𝑛𝑣 + $720𝑥𝑛𝑚 + $910𝑥𝑛𝑡 + $750𝑥𝑛𝑖 + $970𝑥𝑝𝑣 + $790𝑥𝑝𝑚


+ $1,050𝑥𝑝𝑡 + $880𝑥𝑝𝑖 + $900𝑥𝑜𝑣 + $830𝑥𝑜𝑚 + $780𝑥𝑜𝑡 + $820𝑥𝑜𝑖 )
+ ($2,100𝑦𝑗𝑣 + $2,350𝑦𝑗𝑚 + $2,200𝑦𝑗𝑡 + $1,900𝑦𝑗𝑖 + $4,100𝑦𝑐𝑣 + $4,300𝑦𝑐𝑚
+ $3,950𝑦𝑐𝑡 + $3,900𝑦𝑐𝑖 + $2,600𝑦𝑗𝑣 + $2,300𝑦𝑗𝑚 + $2,500𝑦𝑗𝑡 + $2,800𝑦𝑗𝑖 )

Where:
• 𝑍 = Total Cost = Transportation Cost + Production Cost
• $850𝑥𝑛𝑣 = cost of transporting unprocessed juice from New York to Virginia
• $720𝑥𝑛𝑚 = cost of transporting unprocessed juice from New York to Michigan
• $910𝑥𝑛𝑡 = cost of transporting unprocessed juice from New York to
Tennessee
• $750𝑥𝑛𝑖 = cost of transporting unprocessed juice from New York to Indiana
• $970𝑥𝑝𝑣 = cost of transporting unprocessed juice from Pennsylvania to
Virginia
26

• $790𝑥𝑝𝑚 = cost of transporting unprocessed juice from Pennsylvania to


Michigan
• $1,050𝑥𝑝𝑡 = cost of transporting unprocessed juice from Pennsylvania to
Tennessee
• $880𝑥𝑝𝑖 = cost of transporting unprocessed juice from Pennsylvania to
Indiana
• $900𝑥𝑜𝑣 = cost of transporting unprocessed juice from Ohio to Virginia
• $830𝑥𝑜𝑚 = cost of transporting unprocessed juice from Ohio to Michigan
• $780𝑥𝑜𝑡 = cost of transporting unprocessed juice from Ohio to Tennessee
• $820𝑥𝑜𝑖 = cost of transporting unprocessed juice from Ohio to Indiana
• $2,100𝑦𝑗𝑣 = production cost of juice at Virginia
• $2,350𝑦𝑗𝑚 = production cost of juice at Michigan
• $2,200𝑦𝑗𝑡 = production cost of juice at Tennessee
• $1,900𝑦𝑗𝑖 = production cost of juice at Indiana
• $4,100𝑦𝑐𝑣 = production cost of concentrate at Virginia
• $4,300𝑦𝑐𝑚 = production cost of concentrate at Michigan
• $3,950𝑦𝑐𝑡 = production cost of concentrate at Tennessee
• $3,900𝑦𝑐𝑖 = production cost of concentrate at Indiana
• $2,600𝑦𝑗1𝑣 = production cost of jelly at Virginia
• $2,300𝑦𝑗1𝑚 = production cost of jelly at Michigan
• $2,500𝑦𝑗1𝑡 = production cost of jelly at Tennessee
• $2,800𝑦𝑗1𝑖 = production cost of jelly at Indiana

Model Constraints:
1. Tons of unprocessed grape juice available in the different vineyards
𝑥𝑛𝑣 + 𝑥𝑛𝑚 + 𝑥𝑛𝑡 + 𝑥𝑛𝑖 ≤ 1,400 → New york
𝑥𝑝𝑣 + 𝑥𝑝𝑚 + 𝑥𝑝𝑡 + 𝑥𝑝𝑖 ≤ 1,100 → 𝑃𝑒𝑛𝑛𝑠𝑦𝑙𝑣𝑎𝑛𝑖𝑎
𝑥𝑜𝑣 + 𝑥𝑜𝑚 + 𝑥𝑜𝑡 + 𝑥𝑜𝑖 ≤ 1,700 → 𝑂ℎ𝑖𝑜

2. Processing capacity of unprocessed grape juice in the different plants


𝑥𝑛𝑣 + 𝑥𝑝𝑣 + 𝑥𝑜𝑣 ≤ 1,200 → 𝑉𝑖𝑟𝑔𝑖𝑛𝑖𝑎
𝑥𝑛𝑚 + 𝑥𝑝𝑚 + 𝑥𝑜𝑚 ≤ 1,100 → 𝑀𝑖𝑐ℎ𝑖𝑔𝑎𝑛
𝑥𝑛𝑡 + 𝑥𝑝𝑡 + 𝑥𝑜𝑡 ≤ 1,400 → 𝑇𝑒𝑛𝑛𝑒𝑠𝑠𝑒𝑒
𝑥𝑛𝑖 + 𝑥𝑝𝑖 + 𝑥𝑜𝑖 ≤ 1,400 → 𝐼𝑛𝑑𝑖𝑛𝑖𝑎

3. Demand constraint for each product


𝑦𝑗𝑣 + 𝑦𝑗𝑚 + 𝑦𝑗𝑡 + 𝑦𝑗𝑖 = 1,200 → 𝐽𝑢𝑖𝑐𝑒
𝑦𝑐𝑣 + 𝑦𝑐𝑚 + 𝑦𝑐𝑡 + 𝑦𝑐𝑖 = 900 → 𝐶𝑜𝑛𝑐𝑒𝑛𝑡𝑟𝑎𝑡𝑒
𝑦𝑗1𝑣 + 𝑦𝑗1𝑚 + 𝑦𝑗1𝑡 + 𝑦𝑗1𝑖 = 700 → 𝐽𝑒𝑙𝑙𝑦

4. Ingredient’s constraint
27

𝑦𝑗𝑣 + 2𝑦𝑐𝑣 + 1.5𝑦𝑗1𝑣 = 𝑥𝑛𝑣 + 𝑥𝑝𝑣 + 𝑥𝑜𝑣 → 𝑉𝑖𝑟𝑔𝑖𝑛𝑖𝑎


𝑦𝑗𝑚 + 2𝑦𝑐𝑚 + 1.5𝑦𝑗1𝑚 = 𝑥𝑛𝑚 + 𝑥𝑝𝑚 + 𝑥𝑜𝑚 → 𝑀𝑖𝑐ℎ𝑖𝑔𝑎𝑛
𝑦𝑗𝑡 + 2𝑦𝑐𝑡 + 1.5𝑦𝑗1𝑡 = 𝑥𝑛𝑡 + 𝑥𝑝𝑡 + 𝑥𝑜𝑡 → 𝑇𝑒𝑛𝑛𝑒𝑠𝑠𝑒𝑒
𝑦𝑗𝑖 + 2𝑦𝑐𝑖 + 1.5𝑦𝑗1𝑖 = 𝑥𝑛𝑖 + 𝑥𝑝𝑖 + 𝑥𝑜𝑖 → 𝐼𝑛𝑑𝑖𝑎𝑛𝑎

5. Non-negativity constraints
𝑥𝑖𝑗 , 𝑦𝑖𝑗 ≥ 0

Model Summary:
𝑀𝑖𝑛𝑖𝑚𝑖𝑧𝑒 𝑍 = ($850𝑥𝑛𝑣 + $720𝑥𝑛𝑚 + $910𝑥𝑛𝑡 + $750𝑥𝑛𝑖 + $970𝑥𝑝𝑣 +
$790𝑥𝑝𝑚 + $1,050𝑥𝑝𝑡 + $880𝑥𝑝𝑖 + $900𝑥𝑜𝑣 + $830𝑥𝑜𝑚 +
$780𝑥𝑜𝑡 + $820𝑥𝑜𝑖 ) + ($2,100𝑦𝑗𝑣 + $2,350𝑦𝑗𝑚 + $2,200𝑦𝑗𝑡 +
$1,900𝑦𝑗𝑖 + $4,100𝑦𝑐𝑣 + $4,300𝑦𝑐𝑚 + $3,950𝑦𝑐𝑡 + $3,900𝑦𝑐𝑖 +
$2,600𝑦𝑗𝑣 + $2,300𝑦𝑗𝑚 + $2,500𝑦𝑗𝑡 + $2,800𝑦𝑗𝑖 )
Subject to:
𝑥𝑛𝑣 + 𝑥𝑛𝑚 + 𝑥𝑛𝑡 + 𝑥𝑛𝑖 ≤ 1,400
𝑥𝑝𝑣 + 𝑥𝑝𝑚 + 𝑥𝑝𝑡 + 𝑥𝑝𝑖 ≤ 1,100
𝑥𝑜𝑣 + 𝑥𝑜𝑚 + 𝑥𝑜𝑡 + 𝑥𝑜𝑖 ≤ 1,700
𝑥𝑛𝑣 + 𝑥𝑝𝑣 + 𝑥𝑜𝑣 ≤ 1,200
𝑥𝑛𝑚 + 𝑥𝑝𝑚 + 𝑥𝑜𝑚 ≤ 1,100
𝑥𝑛𝑡 + 𝑥𝑝𝑡 + 𝑥𝑜𝑡 ≤ 1,400
𝑥𝑛𝑖 + 𝑥𝑝𝑖 + 𝑥𝑜𝑖 ≤ 1,400
𝑦𝑗𝑣 + 𝑦𝑗𝑚 + 𝑦𝑗𝑡 + 𝑦𝑗𝑖 = 1,200
𝑦𝑐𝑣 + 𝑦𝑐𝑚 + 𝑦𝑐𝑡 + 𝑦𝑐𝑖 = 900
𝑦𝑗1𝑣 + 𝑦𝑗1𝑚 + 𝑦𝑗1𝑡 + 𝑦𝑗1𝑖 = 700
𝑦𝑗𝑣 + 2𝑦𝑐𝑣 + 1.5𝑦𝑗1𝑣 = 𝑥𝑛𝑣 + 𝑥𝑝𝑣 + 𝑥𝑜𝑣
𝑦𝑗𝑚 + 2𝑦𝑐𝑚 + 1.5𝑦𝑗1𝑚 = 𝑥𝑛𝑚 + 𝑥𝑝𝑚 + 𝑥𝑜𝑚
𝑦𝑗𝑡 + 2𝑦𝑐𝑡 + 1.5𝑦𝑗1𝑡 = 𝑥𝑛𝑡 + 𝑥𝑝𝑡 + 𝑥𝑜𝑡
𝑦𝑗𝑖 + 2𝑦𝑐𝑖 + 1.5𝑦𝑗1𝑖 = 𝑥𝑛𝑖 + 𝑥𝑝𝑖 + 𝑥𝑜𝑖
𝑥𝑖𝑗 , 𝑦𝑖𝑗 ≥ 0
28

Computer Solution using Excel


Input the necessary values in table.

Exhibit 1. Excel spreadsheet

Input the necessary values in the Solver Parameter.

Exhibit 2. Solver Parameter


After putting the values in the Solver Parameter, click the “Solve” icon and the result is
shown below.
29

Exhibit 3. Excel Results

Minimize Z = (Transportation cost) + (Production cost)

= (($850 × 0) + ($720 × 150) + ($910 × 0) + ($750 × 1250) + ($970 × 0)


+ ($790 × 950) + ($1,050 × 0) + ($880 × 0) + ($900 × 150)
+ ($830 × 0) + ($780 × 1400) + ($820 × 150))
+ (($2,100 × 0) + ($2,350 × 0) + ($2,200 × 0) + ($1,900 × 1,200)
+ ($4,100 × 75) + ($4,300 × 25) + ($3,950 × 700) + ($3,900 × 100)
+ ($2,600 × 0) + ($2,300 × 700) + ($2,500 × 0) + ($2,800 × 0))

= $ 314,600 + $ 746,000
𝒁 = $ 𝟏𝟎, 𝟔𝟎𝟔, 𝟎𝟎𝟎

The result of the computer solution using Excel shows that Walsh’s Juice Company should
transport 150 tons and 1,250 tons of unprocessed grape juice from their vineyard in New York to
only two of their plants which is to Michigan and Indiana respectively. Their vineyard in
Pennsylvania should only transport 950 tons of unprocessed grape juice to Michigan. Lastly, their
vineyard in Ohio should transport 150 tons to Virginia, 1,400 tons to Tennessee and 150 tons to
Indiana of unprocessed grape juice.
The result also shows that only the plant in Indiana should processed 1,200 tons of juice.
75 tons of concentrate should be processed in their plant in Virginia, 25 tons in Michigan, 700 tons
in Tennessee and 100 tons in Indiana. Lastly, only their plant in Michigan should processed 700
tons of jelly.
If the Walsh’s Juice Company considers this result, the company will have the minimum
total cost of $ 10,606,000 per month which consist of the transportation cost ($314,600) and
production cost ($746,000).
30

B.1 Documentation

C. Conclusion
Walsh’s management only needs to spend $10,606,000 for all their shipping and processing needs
to each of their different plants from their different vineyards. The New York vineyard only sends out 1,400
tons of unprocessed grape juice in total. The Pennsylvania vineyard sends out only 950 tons. The Ohio
vineyard sends out 1,550 tons and is the most efficient vineyard of the three producing the most of the
unprocessed grape juice to ship out. The Indiana plant processes 1,200 tons juices and 100 tons concentrate.
The Virginia plant processes 75 tons of concentrate. The Michigan plant processes 25 tons concentrate and
700 tons jelly. Lastly, the Tennessee plant processes 700 tons of concentrate.

D. References
• Taylor III, B. W. (2016). Introduction to Management Science (12th ed.). Ltd, Saffron House, 6–
10 Kirby Street, London EC1N 8TS: Pearson Education
31

V. The King’s Landing Amusement Park


A. Introduction
Amusement parks are self-contained areas that include shops, rides, and restaurants,
usually spread over several a significant amount of space. The idea can be traced back at least to
medieval times, when bands of entertainers and musicians would gather in a town field or park to
wield their skills for the amusement of the townsfolk. At the conclusion of a few days or weeks,
these performers would move on to the next town. In connection with this, the king’s landing
amusement park is being studied in terms of park’s management planning and scheduling the
number of new employees it hires each week with a total summer month of 5 with the use of linear
programming model. Linear programming model is a mathematical modeling technique in which a
linear function is maximized or minimized when subjected to various constraints. Linear
programming methods are algebraic techniques based on a series of equations or inequalities that
limit a problem and are used to optimize a mathematical expression called an objective function.
Common terminology for linear programming: - linear programming models involve.
resources denoted by i, there are m resources. activities denoted by j, there are n activities,
performance measure denoted by z.
B. Discussion
The King’s Landing Amusement Park is a large amusement theme park located in Virginia.
The Park hires high school and college students to work during the summer months of May, June,
July, August, and September. The student employees operate virtually all the highly mechanized,
computerized rides; perform as entertainers; perform most of the custodial work during park hours;
make up the workforce for restaurants, food services, retail shops, and stores; drive trams; and
park cars.
Park management has assessed the park’s monthly needs based on previous summer’s
attendance at the park and the expected available workforce. Park attendance is relatively low in
May, until public schools are out, and then it increases through June, July, and August, and
decreases dramatically in September, when schools reopen after Labor Day. The Park is open 7
days a week through the summer, until September, when it cuts back to weekends only. Here are
some points to summarize in Amusement Park Case
▪ Total summer months are 5; May, June, July, August and September.
▪ Type of employees are 2; Fresh and Experienced
▪ Total number of weeks in 5 months are 20
▪ Each week labor hours are available in statement
▪ No new employee will hire in September
▪ New employees require 1 week of training to become an experienced
employee
To assist the park’s management to plan and schedule the number of new employees it
hires each week, a linear programming model is formulated and solved to minimize the total
number of new employees it must hire during the summer.
32

Decision Variables:
𝑋𝑛 = 𝑒𝑥𝑝𝑒𝑟𝑖𝑒𝑛𝑐𝑒𝑑 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑤𝑒𝑒𝑘 𝑛 Note that
𝑌𝑛 = 𝑛𝑒𝑤 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑤𝑒𝑒𝑘 𝑛 n = each week (1-20)
𝑍𝑛 = 𝑝𝑜𝑜𝑙 𝑜𝑓 𝑎𝑝𝑝𝑙𝑖𝑐𝑎𝑛𝑡𝑠 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑖𝑛 𝑤𝑒𝑒𝑘 𝑛

Month Week Requirement


May 1 22000
2 22000
3 25000
4 30000
June 1 35000
2 35000
3 40000
4 40000
July 1 45000
2 45000
3 45000
4 45000
August 1 45000
2 45000
3 45000
4 45000
Sep. 1 12000
2 10000
3 10000
4 8000
Table 1. Weekly Hours needed

Objective Function:
To minimize the total number of new employees

Minimize 𝑍 = ∑ 𝑌𝑛 (𝑛 = 1~16)
33

Model Constraints:
10 hours under the supervision of an experienced employee. An employee is considered
experienced after completing 1 week on the job. Experienced employees are considered
part-time and are scheduled to work 30 hours per week
10𝑌𝑛 + 30𝑋𝑛 ≥ 𝐾𝑛 (𝑛 = 1~16)
30𝑋𝑛 ≥ 𝐾𝑛 (𝑛 = 17~20)
15% of all experienced employees quit each week for a variety of reasons and drops to
10% in September.
𝑋𝑛 = 0.85𝑋𝑛−1 + 𝑌𝑛−1 (𝑛 = 2~16)
𝑋𝑛 = 0.9𝑋𝑛−1 + (𝑛 = 18~20)
The pool is diminished by the number of new employees hired the previous week, but each
week through June the park gets 200 new job applicants and it decreases to 100 new
applicants each week for the rest of the summer
𝑍𝑛 = 𝑍𝑛−1 − 𝑌𝑛−1 + 200(𝑛 = 2~8)
𝑍𝑛 = 𝑍𝑛−1 − 𝑌𝑛−1 + 100(𝑛 = 9~16)
At the end of the last week in August, 75% of all the experienced employees will quit to
go back to school
𝑋17 = 0.25𝑥16
General Constraints
𝑌𝑛 ≤ 𝑍𝑛 (𝑛 = 1~16)
𝑋𝑛 , 𝑌𝑛 , 𝑍𝑛 ≥ 0

Complete Linear Programming Model:


Minimize 𝑍 = ∑ 𝑌𝑛 (𝑛 = 1~16)
Subject to
10𝑌𝑛 + 30𝑋𝑛 ≥ 𝐾𝑛
30𝑋𝑛 ≥ 𝐾𝑛
𝑋𝑛 = 0.85𝑋𝑛−1 + 𝑌𝑛−1 (𝑛 = 2~16)
𝑋𝑛 = 0.9𝑋𝑛−1 + (𝑛 = 18~20)
34

𝑍𝑛 = 𝑍𝑛−1 − 𝑌𝑛−1 + 200


𝑍𝑛 = 𝑍𝑛−1 − 𝑌𝑛−1 + 100
𝑋17 = 0.25𝑋16
𝑌𝑛 ≤ 𝑍𝑛
𝑋𝑛 , 𝑌𝑛 , 𝑍𝑛 ≥ 0

This can be solved through Excel Solver, as shown below.

Exhibit 1. Excel (Encoded Data of The King’s Landing Amusement Park Case)

Then click the ‘Data’ menu where the Solver add on is seen (Exhibit 1.1).

Exhibit 1.1 Excel Solver Menu


35

Open Excel Solver and enter the objective function, decision variables and the subject
constraints, as shown below (Exhibit 1.2). The objective function is in cell D23, and decision
variables are in cell range E2:E17. GRG Nonlinear is selected in solving this method for smooth
nonlinear solver problems.

Exhibit 1.2 Solver Parameters


And the following solution will appear:

Exhibit 1.3 Results


36

Exhibit 1.3.1 Results

B.1 Documentation
37

C. Conclusion
Thus, the minimum numbers of new employees required in the park are 3,532. The park's
management should plan and schedule the number of new employees each week such as in the
first week of May they should hire at least 100 employees and at the end of the week of August,
there will be no employees hired as another school year is about to start making employees
specially the experienced ones go back to school.

D. References
• Ackoff, R. L. , Eilon, . Samuel , Tanenbaum, . Morris and Holstein, . William K. (2018,
September 12). Operations research. Encyclopedia Britannica.
https://www.britannica.com/topic/operations-research
• Wright, S. J. (2021, July 29). optimization. Encyclopedia Britannica.
https://www.britannica.com/science/optimization

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