Usman Institute of Technology

HW-3-B- Spring 2022 Semester

Course Code: MS 351 Course Title: Operation Research Submission Date: 19/06/2022

Maximum Marks: 10 Max Time Allowed: 7 days

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Seat No. st-18030 Roll No. 18b-067-se

Batch: Click or tap here to enter text. Enrollment No. UIT-096/2018-19

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1. The Westchester Chamber of Commerce periodically sponsors public service seminars and
programs. Currently, promotional plans are under way for this year’s program. Advertising
alternatives include television, radio, and newspaper. Audience estimates, costs, and maximum
media usage limitations are as shown.

Constraints Television Radio Newspaper

Audience per advertisement 100,000 18,000 40,000
Cost per advertisement $2000 $300 $600
Maximum media usage 10 20 10

To ensure a balanced use of advertising media, radio advertisements must not exceed 50% of the
total number of advertisements authorized. In addition, television should account for at least 10% of
the total number of advertisements authorized.

a) If the promotional budget is limited to $18,200, how many commercial messages should be run
on each medium to maximize total audience contact? What is the allocation of the budget
among the three media, and what is the total audience reached?

Objective: To increase the total number of audiences contact.

Key decision: To determine the number of advertisements to be done on tv, radio, and
newspaper.

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 Decision Variables: The key decision will be x1, x2, and x3. Let x1 = the number of
advertisements to be done on TV. X2 = the number of advertisements to be done on the Radio.
X3 = the number of advertisements to be done in the newspaper.
Feasibility: All the variables will be positive as advertisements cannot be
negative. Objective function: Max = 10000x1 + 18000x2 + 40000x3
Constraints: Maximum media usage (TV):
X1 ≤ 10
Maximum media usage (Radio):
X2 ≤ 20
Maximum media usage (newspaper):
X3 ≤ 10
Total advertisement budget:
2000x1 + 300x2 + 600x3 ≤ 18200
Total number of advertisement authorized for Radio:
-0.5x1+0.5x2-0.5x3 ≤ 0
Tital number of advertisement authorized for TV:
0.9x1-0.1x2-o.1x3>= 0
Mathematical Model: Max = 10000x1 + 18000x2 + 40000x3
subj to , X1 ≤ 10
X2 ≤ 20
X3 ≤ 10
4000x1 + 300x2 + 600x3 ≤ 18200
-0.5x1+0.5x2-0.5x3 ≤ 0
0.9x1-0.1x2-o.1x3>= 0
where, x1,x2,x3>=0
tv = 4 Radio = 14 newspaper = 10
b) By how much would audience contact increase if an extra $100 were allocated to the
promotional budget?

The audience will increase by 51.3044

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2. The management of Hartman Company is trying to determine the amount of each of two
products to produce over the coming planning period. The following information concerns labor
availability, labor utilization, and product profitability.
Department Product (hours/unit) Labor-Hours Available
1 2
A 1.00 0.35 100
B 0.30 0.25 36
C 0.20 0.50 50
Profit contribution/unit $30.00 $15.00

a) Develop a linear programming model of the Hartman Company problem.

Objective: The objective is to maximize the profit.

Key decision: To determine the amount of product to be made in the coming period.

Decision Variables: The key decision will be x1 and x2.

Let x1 = the amount of product 1.

X2 = the amount of product 2.

Feasibility: All the variables will be positive as production cannot be in negative.

Objective function: Max = 30x1 + 15x2

Constraints:

1x1 + 0.35x2 ≤ 100

0.30x1 + 0.25x2 ≤ 36

0.20x1 + 0.50x2 ≤ 50

Mathematical Model:

Max = 30x1 + 15x2

Subject to,

1x1 + 0.35x2 ≤ 100

0.30x1 + 0.25x2 ≤ 36

0.20x1 + 0.50x2 ≤ 50

Where,

X1, x2 ≥ 0

b) Solve the model to determine the optimal production quantities of products 1 and 2.

Optimal solution is to produce 85.51 quantities of product 1 and 41.37 quantities of product 2.

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c) In computing the profit contribution per unit, management doesn’t deduct labor costs because
they are considered fixed for the upcoming planning period. However, suppose that overtime
can be scheduled in some of the departments. Which departments would you recommend
scheduling for overtime? How much would you be willing to pay per hour of overtime in each
department?

As the slack time for Depart A and B is 0, that means they are used fully. Thus, we will prefer
having overtime in this area. The value for department A will be $20.68 and Depart B is 31.03

d) Suppose that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C,
respectively. The cost per hour of overtime is $18 in department A, $22.50 in department B, and
$12 in department C. Formulate a linear programming model that can be used to determine the
optimal production quantities if overtime is made available.

Complete mathematical model

Max P=30 x 1+15 x 2−18 x A−22.5 x B −12 x C

Subjected to

x 1+ 0.35 x 2−x A ≤ 100

0.30 x 1+ 0.25 x 2−22.5 x B ≤ 36

0.20 x 1+ 0.50 x 2−12 x C ≤ 50

x A ≤10

xB ≤ 6

xC ≤ 8

Where x 1 , x 2 x 2 , x A , x B , xC ≥ 0

e) What are the optimal production quantities, and what is the revised total contribution to profit?
How much overtime do you recommend using in each department? What is the increase in the
total contribution to profit if overtime is used?

optiaml sol is 88.21 units of product 1 , 62.07 unit for product 2 and profit is $3264.31.
over time in depart A will be 10 hours, for DepartB 6 hours and for C is 0.

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3. The employee credit union at State University is planning the allocation of funds for the coming
year. The credit union makes four types of loans to its members. In addition, the credit union
invests in risk-free securities to stabilize income. The various revenue producing investments
together with annual rates of return are as follows:
Type of Loan/Investment Annual Rate of Return (%)
Automobile loans 08
Furniture loans 10
Other secured loans 11
Signature loans 12
Risk-free securities 09

The credit union will have $2 million available for investment during the coming year. State laws and
credit union policies impose the following restrictions on the composition of the loans and
investments.
 Risk-free securities may not exceed 30% of the total funds available for investment.
 Signature loans may not exceed 10% of the funds invested in all loans (automobile,
 furniture, other secured, and signature loans).
 Furniture loans plus other secured loans may not exceed the automobile loans.
 Other secured loans plus signature loans may not exceed the funds invested in risk-free
securities.
How should the $2 million be allocated to each of the loan/investment alternatives to maximize total
annual return? What is the projected total annual return?

Objective: the objective is to maximize the total annual return

Key decision: key decision Is to determine how much amount should be allocated to the
various variables.
Key variable: let there be 5 variables X1= loan to be given to automobiles X2= loan to be
given to furniture. X3 = loan to be given to other secured loans X4 = loan to be given to
signature loans X5 = loan to be given to risk-free securities.
Feasibility: variables will be positive as money/ loan cannot be in negative.
Objective function: Max = 0.08x1+ 0.10x2+ 0.11x3+0.12x4+0.09x5
Constraints: X2+x3≤x3
X3+x4≤ x5
X4≤0.10(x1+x2+x3+x4)
X5≤600,000
Mathematical model
Max = 0.08x1+ 0.10x2+ 0.11x3+0.12x4+0.09x5
subject to, : X2+x3≤x3
X3+x4≤ x5
X4≤0.10(x1+x2+x3+x4)
X5≤600,000
where x1,x2,x3,x4,x5 >=0
the optimal solution is to give automobiles the amount of $630000, for furniture
$170000, other secure $460000, risk free security for 600000. Maximum annual return
will be $188800

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4. Hilltop Coffee manufactures a coffee product by blending three types of coffee beans. The cost
per pound and the available pounds of each bean are as follows:
Bean Cost per Pound Available Pounds
1 $0.50 500
2 $0.70 600
3 $0.45 400

Consumer tests with coffee products were used to provide ratings on a scale of 0–100, with higher
ratings indicating higher quality. Product quality standards for the blended coffee require a
consumer rating for aroma to be at least 75 and a consumer rating for taste to be at least 80. The
individual ratings of the aroma and taste for coffee made from 100% of each bean are as follows.
Bean Aroma Rating Taste Rating
1 75 86
2 85 88
3 60 75
Assume that the aroma and taste attributes of the coffee blend will be a weighted average of the
attributes of the beans used in the blend.

a) What is the minimum-cost blend that will meet the quality standards and provide 1000 pounds
of the blended coffee product?

Mathematical Model

Min C = 0.50 x 1+ 0.70 x 2 +0.45 x 3

Subject to:

x 1+ x2 + x 3=1000

x 1 ≤ 500

x 2 ≤ 600

x 3 ≤ 400

75 x 1 +85 x 2+ 60 x 3
≥ 75
x 1 + x 2+ x 3

Or
10 x 2−15 x 3 ≥ 0

86 x1 +88 x 2 +75 x 3
≥ 80
x 1 + x 2+ x3
Or
6 x 1+ 8 x2 −5 x 3 ≥0 The optimal solution is for bean 1 500 punds , bean 2 300 pounds and bean 3
200 pounds. Minimum cost for coffee is 550 pounds.

b) What is the cost per pound for the coffee blend?

550/1000 = 0,55 pounds

c) Determine the aroma and taste ratings for the coffee blend.

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aroma rating is 75 as surplus for araoma is 0 and tasting rating is 84.4 as surplus for taste is
4400. Total rating = 84.4

d) If additional coffee were to be produced, what would be the expected cost per pound?
Additional coffee will produced at a cost of 0.60 dollars per pound

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5. Ajax Fuels, Inc., is developing a new additive for airplane fuels. The additive is a mixture of three
ingredients: A, B, and C. For proper performance, the total amount of additive (amount of A+
amount of B amount of C) must be at least 10 ounces per gallon of fuel. However, because of
safety reasons, the amount of additive must not exceed 15 ounces per gallon of fuel. The mix or
blend of the three ingredients is critical. At least 1 ounce of ingredient A must be used for every
ounce of ingredient B. The amount of ingredient C must be at least one-half the amount of
ingredient A. If the costs per ounce for ingredients A, B, and C are $0.10, $0.03, and $0.09,
respectively, find the minimum-cost mixture of A, B, and C for each gallon of airplane fuel.

Objective: objective is to minimize the total cost of mixture A B and C

Key Decision

The key decision is to determine amount of ingredient A,B and C to be mixed per gallon of fuel

Decision Variable

There will be 5 decision variables. let the variables be x1 , x2 , x3 where x1 is the amount of
ingredient A, x2 is the amount of ingredient B and x3 is the amount of ingredient C

Feasibility

Decision variables will be positive as amount of ingredient can not be negative

Objective Function

Objective is to minimize the cost mixture of A,B and C for each gallon of airplane fuel

Min = 0.10x1 + 0.03x2+ 0.09x3

Constraints

Amount of additives greater than or equals to 10 in ounces(oz)

X1 + x2+ x3 >= 10

Amount of additives less than or equals to 15 in ounces(oz)

X1 + x2+ x3 <= 15

Ingredient A greater than equal to B

X1-x2>= 0

Ingredient C is greater than equals to half of ingredient A

-0.5x1+x3>=0

Complete mathematical model

Min = 0.10x1 + 0.03x2+ 0.09x3

Subjected to

X1 + x2+ x3 >= 10

X1 + x2+ x3 <= 15

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X1-x2>= 0

-0.5x1+x3>=0

Where, x1,x2,x3 >= 0

Minimum cost of mixture of ingredient A, B, C are $4, $4 and $2 respectively for each gallon of
airplane fuel and the cost per gallon is $0.7

The End

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