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Integer Prog Formul

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16 views2 pages

Integer Prog Formul

Uploaded by

sayantini123bak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Tutorial

Integer Programming - Formulation


1. A community council must decide which recreation facilities to construct in its community.
Four new recreation facilities have been proposed- a swimming pool, a tennis center, an athletic
field and a gymnasium. The council wants to construct facilities that will maximize the expected
daily usage by the residents of the community, subject to land and cost limitations. The expected
daily usage and cost and land requirements for each facility follow:

Recreation facility Expected usage Cost Land Req (acres)


(people/day)
Swimming pool 300 $35,000 4
Tennis center 90 10,000 2
Athletic field 400 25,000 7
Gymnasium 150 90,000 3
The community has a $120,000 construction budget and 12 acres of land. Because the swimming
pool and tennis court can be built on the same part of the land parcel, only one of these two facilities
can be constructed. The council wants to know which of the recreational facilities to construct to
maximize the expected daily usage.

2. A company is considering five investments. The net present value (NPV) and the initial cash
outflow required for each of them is given below:

Investment NPV Cash Outflow


I Rs 20,000 Rs 12,000
II 28,000 14,000
III 18,500 7,000
IV 27,500 13,000
V 31,000 16,000
The company has a total of Rs 48,000 to invest. Further, it is required that
(i) The company should not make more than 3 investments.
(ii) The company should invest in investment II if it invests in investment III. (discuss
variations: 1. should invest in investment II only if it invests in investment III;
2. can invest in II only if it invests in investment III)
(iii) If the company invests in investment IV, then it should not invest in investment V.

Formulate so as to maximize NPV.

3. Fixed-charge problem- Sitka Manufacturing is planning to build at least one new plant, and
three cities are being considered: Baytown, Lake Charles and Mobile. Once the plant or plants
have been constructed, the company wishes to have sufficient capacity to produce at least 38,000
units each year. The costs associated with the possible locations are given in the table below:
SITE Annual Fixed Variable Cost per Annual Capacity
Cost unit
Baytown $340,000 $32 21,000
Lake Charles $270,000 $33 20,000
Mobile $290,000 $30 19,000
In modeling this as an integer program, the objective is to minimize the total of the fixed cost and
variable cost. The constraints are (i) total production capacity is at least 38,000; (2) number of
units produced at the Baytown plant is 0 if the plant is not built, and it is no more than 21,000 if
the plant is built; (3) number of units produced at the Lake Charles plant is 0 if the plant is not
built, and it is no more than 20,000 if the plant is built; (4) number of units produced at the Mobile
plant is 0 if the plant is not built, and it is no more than 19,000 if the plant is built.

4. Distribution System Design- The Martin-Beck Company operates a plant in St. Louis with an
annual capacity of 30,000 units. Product is shipped to regional distribution centers located in
Boston, Atlanta, and Houston. Because of an anticipated increase in demand, Martin-Beck plans
to increase capacity by constructing a new plant in one or more of the following cities: Detroit,
Toledo, Denver, or Kansas City. The estimated annual fixed cost and the annual capacity for the
four proposed plants are as follows:

Proposed Plant Annual Fixed Cost Annual Capacity


Detroit $ 175,000 10,000
Toledo $ 300,000 20,000
Denver $ 375,000 30,000
Kansas City $ 500,000 40,000
The company’s long-range planning group has developed forecasts of the anticipated annual
demand at the distribution centers as follows:

Distribution Center Annual Demand


Boston 30,000
Atlanta 20,000
Houston 20,000
The shipping cost per unit from each plant to each distribution center is as follows:

Distribution Centers
Plant Site Boston Atlanta Houston
Detroit 5 2 3
Toledo 4 3 4
Denver 9 7 5
Kansas City 10 4 2
St. Louis 8 4 3
The decision has to be made as to which new plant or plants will be constructed.

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