1. A paint manufacturer manufactures two types of paint, Regular and Premium.

To
manufacture these paints, he mixes three components, a base, a pigment, and some
adhesive. Each liter of Regular paint has 950ml of base, 40ml of pigment, and 10ml
of adhesive. Each liter of Premium paint has 930ml of base, 55ml of pigment, and
15ml of adhesive. Regular paint sells at Rs.150 a liter, and Premium paint sells at
Rs.180 a liter.

The manufacturer obtains the components from two suppliers. He has signed a
yearly contract with the first supplier valued at Rs.2,00,000, to supply him with
4000 liters of base and 340 liters of pigment each day. He has also signed a yearly
contract with the second supplier, valued at Rs.1,50,000 to supply him with 3500
liters of base and 100 liters of adhesive each day. The manufacturing unit is staffed
by ten permanent employees each earning Rs. 10,000 per month, in addition to a
bonus of Rs. 0.50 for every liter of Regular paint produced, and Rs.0.80 for every
liter of Premium paint produced.

The manufacturer wants to find out how much Regular and Premium paint he
should produce each day in order to maximize the contribution to profits. What
would be the best product mix from the manufacturer’s point of view?

Generate a Sensitivity Report for this problem. Based on the report, answer the
following questions.

a. Assume that you have the option of selling off a portion of your daily stock of
pigment. What price would you charge for it? How much pigment would you
be willing to sell off at this price?
b. Assume that you have the option of buying more pigment. What price would
you pay per liter of pigment bought? How much would you buy at this price?
c. If the company employees were given a free hand at deciding the product
mix, what product mix would they suggest? How does this product mix
compare with the product mix you obtained earlier?
Solution:

Decision variables: R: liters of Regular paint, P: liters of Premium paint

Model:
Maximize 145R + 172P
Subject to
Base requirement 0.95R + 0.93P  750
0
Pigment requirement 0.04R +  340
0.055P
Adhesive 0.01R +  100
requirement 0.015P
Non negativity R, P  0

Result:
Best product mix: Regular 6398.67 liter, Premium 1528.24 liter.
Contribution: Rs.1190664
Sensitivity report:
Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$2 R 6398.671096 0 145 30.69892473 19.90909091
$C$2 P 1528.239203 0 172 27.375 30.05263158

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$E$5 Base requirement 7500 72.75747508 7500 575 1750.909091
$E$6 Pigment requirement 340 1897.009967 340 39.7979798 24.21052632
$E$7 Adhesive requirement 86.910299 0 100 1E+30 13.089701

(a) Charge anything above Rs. 1897.01/liter. Can sell off up to 24.21 liter.
(b) Pay anything less than Rs.1897.01/liter. Can buy up to 39.80 liter.
For employees: Constraints remain same, objective changes to maximize 5R+8P.
Best product mix: only Premium 6181.82 liter.
Comparison
Manufacturer Employee
profits earnings
Manufcturer’s 1190664 44219.27
mix
Employee’s mix 1063273 49454.55
2. A cafeteria serves one among three meals, Meal A, Meal B, and Meal C to all students
in a school each day for lunch. Each student gets one serving of the meal of the day.
One serving of Meal A contains 30g of protein, 65g of carbohydrates, 25mg of
minerals, and 55g of fat. One serving of Meal B contains 45g of protein, 40g of
carbohydrates, 20mg of minerals, and 45g of fat. One serving of Meal C contains 40g
of protein, 35g of carbohydrates, 25mg of minerals, and 45g of fat.

The school dietitian has suggested that from each meal serving, students should
obtain on average at least 40g each of proteins and carbohydrates, between 22 and
30mg of minerals, and at most 50g of fat. One serving of Meal A, Meal B, and Meal C
costs the cafeteria Rs. 20, Rs. 35 per meal, and Rs. 40 respectively. What is the
minimum average price per meal that can be set for the meal plan? Can you solve this
problem using only two decision variables?

Solution:

Decision variables A, B, C: fraction of meals that were type A, B, and C resp.

Model
Minimize 20A + 35B + 40C (cost of avg.
meal)
Subject to
Consistency A+B+C = 1
Protein 30A + 45B +  40
40C
Carbohydrates 65A + 40B + 35C  40
Mineral (Min) 25A + 20B + 25C  22
Mineral (Max) 25A + 20B + 25C  30
Fat 55A + 45B + 45C  50
Non- A, B, C  0
negativity
Result:
A 30%, B 60%, C10%

Eliminating C from the model. Replace C = 1 – (A+B).

Consistency condition vanishes, the non-negativity of C yields A + B  1.
Model simplifies to

Minimize 20A + 35B + 40 – 40A – 40B i.e., Maximize 20A + 5B

Subject to
Non negativity of C A+B  1
Protein –10A + 5B  0
Carbohydrates 30A + 5B  5
Mineral (Min) –5B  –3
Mineral (Max) –5B  5 (redundant)
 Fat 10A  5
Non-negativity A, B  0
3. Computers Unlimited sells microcomputers and distributes them from three ware-
houses at Richmond, Atlanta, and Washington to four universities Tech, A&M, State,
and Central. The available supply at the three warehouses, demand at the four
universities, and shipping costs in ($/unit) are shown in the following table:

University Tech A&M State Centra Supply

l
Richmond 22 17 30 18 420
Atlanta 15 35 20 25 610
Washington 28 21 16 14 340
Demand 520 250 400 380

The cost of not supplying microcomputers to the four universities (in $/unit) are $40,
$65, $25, and $50. This is a shortage cost and reflects loss of future sales and goodwill.
Computers Unlimited’s original goal was to minimize the total cost of supplying
computers to universities. However, it has indicated the following goals, arranged in
order of their importance:
1. A&M has been one of its better long-term customers, so Computers Unlimited
wants to meet all of A&M’s demands.
2. Because of recent problems with a trucking union, it wants to ship at least 80
units from the Washington warehouse to Central University.
3. To maintain the best possible relations with all its customers, Computers
Unlimited would like to meet no less than 80% of each customer’s demand. For
this, it is willing to make an allowance of up to 10% on the total transportation
cost of optimal allocation.
How many computers should Unlimited Computers supply from each warehouse to
each university?

Solution:

Parameters
Warehouses I = {i} = {1,2,3}, supplies w i
Universities J = { j} = {1,2,3,4}, demands d j
costs: C = {c ij}
cost of not supplying to universities: W ={w j }
Decision variables
x ij: number supplied from i to j,
s j: shortfall at University j
Original model
Minimize ∑ ∑ cij x ij + ∑ w j s j
i ∈I j ∈J j
Subject to
Demand ∑ x ij +s j = dj for all j ∈ J
constraints i ∈I

Supply constraints ∑ x ij  wi for all i∈ I

j∈ J
Non negativity x ij , s j  0

Result:
Original goal: cost = $26430 (Transportation cost = $21930)
Tech A&M State Central
Richmond 0 250 0 170
Atlanta 520 0 90 0
Washingto 0 0 130 210
n
Shortages 0 0 180 0

In this solution, Goal (1), (2) are satisfied but not (3).
So for the third goal, we modify the model as follows
Minimize ∑ ∑ cij x ij + ∑ w j s j
i ∈I j ∈J j
Subject to
Demand constraints ∑ x ij +s j = dj for all j ∈ J
i ∈I
Supply constraints ∑ x ij  wi for all i∈ I
j∈ J
Limit transport cost ∑ ∑ cij x ij  2412 (110% of 21930)
i ∈I j ∈J 3
No shortage at A&M s2 = 0
Supply 80 from 3 to 4 x 34  80
All shortages < 80% sj  0.8d j for all j ∈ J
Non negativity x ij , s j  0

Cost = $28430 (Transportation cost = $22430)

Tech A&M State Central

Richmond 0 250 0 170
Atlanta 420 0 190 0
Washingto 0 0 130 210
n
Shortages 100 0 80 0
4. A company that manufactures and sells consumer durables has noted that the sales of
premium television sets can be predicted from general satisfaction levels of the public at
large. At the end of each month, the research department provides the company an
indicator for the next month’s satisfaction levels. This indicator is a number between 0
and 100, A high value of the indicator indicates a higher sales level for the next month.
The values of the indicator for the last twelve months and the numbers of premium
television sets sold during the same months are given in the table below.
Month Indicator Sales
1 61 266
2 52 123
3 74 353
4 66 298
5 79 260
6 59 261
7 61 235
8 88 309
9 62 278
10 76 247
11 87 288
12 60 210

The management of the company believe that the sales of any given month is a linear
function of the indicator for that month, and want to derive the function based on the
data available. They realize that when they come up with an equation, there would be a
difference between the number of sets actually sold in a given month and the number
of sets that their model would predict for that month. They figure that a good fit would
be a model which minimized the sum of the deviations between the actual and
predicted numbers over all twelve months. (Notice that the deviation would be non-
negative regardless of whether the prediction exceeded or fell short of the actual
sales.) Construct a linear programming model to output the linear function that the
management is looking for.

Solution:

Let the straight line we want be ^S=mI +c where m and c are the constants we need to
find.
Decision variables: m, c, and for each point j the positive deviation of the point from the
+¿¿ −¿ ¿
line d j and the negative deviation d j .
 So the model becomes
Minimize ∑ ¿¿
j
Subject to
y j for all points
−¿¿

m x j+ c+ d +¿−d ¿
Balancing each j
j
=
point j
−¿¿

d +¿
j
,d j ¿
 0 for all points
j

Solving this generates the solution: be ^S=0.964 I +204.107.

5. The Moore & Harman Company is in the business of buying and selling grain. An
important aspect of the company’s business is arranging for the purchased grain to be
shipped to customers. If the company can keep freight costs low, profitability will
improve. The company recently purchased three rail cars of grain at Muncie, Indiana;
six rail cars at Brazil, Indiana; and five rail cars at Xenia, Ohio. Twelve carloads of grain
have been sold. The locations and the amount sold at each location are as follows:
6.

Number of
Location Rail Car Loads
Macon, GA 2
Greenwood, SC 4
Concord, SC 3
Chatham, NC 3

All shipments must be routed through either Louisville or Cincinnati. The shipping
 costs per bushel1 (in cents) from the origins to Louisville and Cincinnati are given
below.
1 kilogram is approximately 77.7 bushels.

To
From Louisville Cincinnati
Muncie 8 6
Brazil 3 8
Xenia 9 3

The costs per bushel to ship from Louisville and Cincinnati to the destinations are given

below.

To
From Macon Greenwood Concord Chatham
Louisville 44 34 34 32
Cincinnati 57 35 28 24

Determine a shipping schedule that will minimize the freight costs necessary to
satisfy demand. Which (if any) rail cars of grain must be held at the origin until buyers
can be found?
Solution:

There are a total of 9 points in the distribution setup. Let us call them M, B & X (sources)
L & C (intermediate points), and Ma, Gr, Co & Ch (destinations).
The number of bushels per carload is a constant, so the total costs to send grain
between points is considered to be the numerical value of the cost per bushel in
appropriate units.
The distribution system can be represented as a diagram as below.
For the model, we will assume x ij is the amount of grain sent from point i to point j.
So the model minimizes total transportation costs subject to demand and supply
constraints and balance constraints at L and C.
Model
Minimize 8 x ML + 6 x MC +…+57 x CMa +35 x CGr +28 x CCo+ 24 x CCh
Subject to:
Supply at M x ML + x MC  3
Supply at B x BL + x BC  6
Supply at X x XL + x XC  5
Balance at L x ML + x BL + x XL −( x LMa + x LGr + x LCo + x LCh ) = 0
Balance at C x MC + x BC + x XC −( x CMa + x CGr + xCCo + x CCh) = 0
Demand at Ma x LMa + x CMa = 2
Demand at Gr x LGr + x CGr = 4
Demand at Co x LCo + x CCo = 3
Demand at Ch x LCh + x CCh = 3
Non negativity All variables  0

Result:

B to L 6 carloads, M to C 1 carload, X to C 5 carloads;

L to Ma 2 carloads, to Gr 4 carloads; C to Co 3 carloads, to Ch 3 carloads
 Total cost $419 times the number of bushels in a carload.

2 carloads are to be held at Muncie.

6. As a small tea seller, you blend three different types of tea into four mixtures that are
popular with your customers. Of this the first type of tea adds color to the tea, the
second adds aroma, and the third (which is the cheapest type) is used primarily to
make up volumes. The four mixtures sell at Rs.100/kg, Rs.125/kg, Rs.175/kg, and
Rs.235/kg respectively. The amounts (in gms) of the three types of tea that go into
each kg of each mixture is given in the table below.

Mix 1 Mix 2 Mix 3 Mix 4

Type 1 200 200 600 400
Type 2 200 400 200 600
Type 3 600 400 200 0

You can sell as much tea that you can blend each day.

Now, at the end of the day, you receive the information that you would have 20 kg of
the first type of tea, 25 kg of the second type of tea, and 70 kg of the third type of tea
available to you for blending tomorrow. You need to decide on the amounts of each
blend that you need to produce. Can you compute tomorrow’s blending plan using only
two variable linear programs?

Solution:
Decision variables:
x 1 through x 4 denotes the kilos of Mix 1 through Mix 4.

Naïve model:

Maximize 100 x 1+125 x 2+ 175 x 3 +235 x 4

Subject to:
0.2 x 1+0.2 x 2+ 0.6 x3 +0.4 x 4 ≤ 20 (1)
0.2 x 1+0.4 x2 +0.2 x 3+ 0.6 x 4 ≤ 25 (2)
0.6 x 1+ 0.4 x 2+ 0.2 x 3 +0.0 x 4 ≤70 (3)
x1 , x2 , x3 , x4 ≥ 0

Multiplying (1) by 3, we get 0.6 x 1+ 0.6 x2 +1.8 x 3+ 1.2 x 4 ≤ 60 which shows that (3) is
redundant.
So now we have the following model that will give the same solution.

Maximize 100 x 1+125 x 2+ 175 x 3 +235 x 4

Subject to:
0.2 x 1+0.2 x 2+ 0.6 x3 +0.4 x 4 ≤ 20 (1)
 0.2 x 1+0.4 x2 +0.2 x 3+ 0.6 x 4 ≤ 25 (2)
x1 , x2 , x3 , x4 ≥ 0

We can create the dual of this model as shown below and solve it (it becomes a 2-
variable problem)

Minimize 20 u+25 v
Subject to:
0.2 u+0.2 v ≥100 (4)
0.2 u+0.4 v ≥ 125 (5)
0.6 u+0.2 v ≥ 175 (6)
0.4 u+ 0.6 v ≥235 (7)
u,v ≥0

The solution to this problem is u=325 , v=175 , objective value = 10875. Constraints (5)
and (6) are not binding at the optimal solution. So we can conclude x 2 and x 3 must be 0.
Since both u and v are nonzero at the optimal point, constraints (1) and (2) must hold as
equalities in the primal optimal. So we get at primal optimal
0.2 x 1+0.4 x 4=20 (1a)
0.2 x 1+0.6 x 4 =25 (2a)

This leads to the primal optimal solution x 1=50 , x2 =x3 =0 , x 4 =25.

 7. A company manufactures and distributes widgets in a small country. The company has
decided to rent warehouses in certain parts of the country, and distribute widgets from these
warehouses. Preliminary investigation has yielded five candidate sites for the warehouses
(labeled A, B, C, D, and E). The monthly rents for warehouse space and the capacity of the space
in these five sites are given in the table below:

A B C D E
Monthly Rent (Rs.) 7550 9900 10575 9525 11500
Capacity (Tons) 115 85 105 50 150

The company supplies clients in the country in eight different demand locations (la-
beled 1 through 8). The costs for supplying one ton of widgets from each warehouse
site to each demand location is given in the table below. The last row of the table lists
the monthly demands at each location.

1 2 3 4 5 6 7 8
A 150 152 391 170 360 423 236 321
B 318 442 382 223 432 333 284 386
C 487 175 253 194 272 300 146 379
D 382 463 238 135 258 118 315 317
E 425 175 484 237 171 418 243 138
Demands 25 19 41 50 29 28 27 23

In which of the candidate sites should the company rent warehouse space in order to
supply its customers at minimum cost?

Solution:

Parameters
Warehouses I = {i} = {A,B,C,D,E}, Capacity w i
Demand Locations J = { j} = {1,2,3,4,5,6,7,8}, demands d j
Capacity S = { si}

Costs: C = {c ij}
Monthly warehouse rent: W ={w i}
Decision variables
x ij: number supplied from i to j,
b i: warehouse rental decision i
Model
Minimize ∑ ∑ cij x ij + ∑ w i b i
i ∈I j ∈J i
Subject to
Demand constraints ∑ x ij = dj for all j ∈ J
i ∈I
Supply constraints ∑ x ij  si∗bi for all i∈ I
j∈ J
Binary constraint bi = {0,1}
Non negativity x ij  0
constraint

Result:

Rent
  1 2 3 4 5 6 7 8 Decision
(Binary)

A 25 19 19 50 0 0 2 0 1
B 0 0 0 0 0 0 0 0 0
C 0 0 0 0 0 0 0 0 0
D 0 0 22 0 0 28 0 0 1
E 0 0 0 0 29 0 25 23 1

Total Cost = Supply Cost + Warehouse Rental => 45787 + 28575 = 74362
Basic LP
1. Draw the feasible region (set of feasible solutions) of the following linear program
(with 2 variables)

Max 2x1−x2
ST: x1+x2 ≥ 1
x1−x2 ≤ 0
3x1+x2 ≤ 6
x1 , x2 ≥ 0

Determine the optimal solution to this problem by inspecting your drawing.