J. K. SHAH CLASSES FINAL C.A.

- COSTING

LINEAR PROGRAMMING PROBLEM

PART A : FORMULATION
Q.1. A company has three operational departments (weaving, processing and packing) with
capacity to produce three different types of clothes namely suitings, shirtings and woollens
yielding the profit ` 2, ` 4 and ` 3 per meter respectively. One - meter suiting requires 3
minutes in weaving, 2 minutes in processing and 1 minute in packing. Similarly one meter of
shirting requires 4 minutes in weaving. 1 minute in processing and 3 minutes in packing
while one meter woollen requires 3 minutes in each department. In a week, total run time of
each department is 60, 40 and 80 hours for weaving, processing and packing departments
respectively.
Formulate the linear programming problem to find the product mix to maximize the profit.

Q.2. The Voltex Company produces an air conditioner / heating unit. The company currently has
firm orders for 6 months into the future. The company can schedule its production over the
next 6 months to meet orders on either a regular or on overtime basis. Consider orders and
the associated production costs for the next 6 months as follows :
Month Jan. Feb. March April May June
Orders 590 610 650 700 500 700
Cost per unit (`)
: Regular Production 50 52 51 55 47 50
: Overtime Production 62 58 63 60 55 52
Maximum number of units which can be produced on regular and overtime basis are 500
and 300 respectively.
With 75 air conditioners in stock at the beginning of January, the company wishes to have at
least 100 air conditioners in stock at the end of June. The inventory - carrying costs for air
conditioners is ` 10 per unit per month.
Formulate the problem as Linear Programming Problem.

Q.3. A city hospital has the following minimal daily requirement for nurses:
Period Clock time (24 hours day) Minimal number of nurses required
1 6 AM – 10 AM 2
2 10 AM – 2 PM 7
3 2 PM – 6 PM 15
4 6 PM – 10 PM 8
5 10PM – 2 AM 20
6 2 AM – 6 AM 6
Nurses report to the hospital at the beginning of each period and work for consecutive 8
hours. The hospital wants to determine the minimal number of nurses to be employed so
that there will be sufficient number of nurses available for each period. Formulate LPP. Do
not solve.

:1: REVISION NOTES – MAY ‘19

J. K. SHAH CLASSES FINAL C.A. - COSTING
PART B : SIMPLEX METHOD
Q.1. Solve the following L.P.P. by the Simplex Method
Maximize Z 6x 1 + 7x 2
Subject to : 2x 1 + 3x 2 ≤ 12
2x 1 + x 2 ≤ 8
x 1 ≥ 0, x 2 ≥ 0

Q.2. Solve the following L. P. P. by the Simplex Method.

Minimize Z = 750y1 + 200y2 + 600y3
Subject to : y1 + y3 ≤ 3
3/2/y1 + 5y2 + y3 ≥ 4
Where y1, y2, y3 ≥ 0

Q.3. Given below are the objective function, the constraints and the final simplex tableau for a
linear programming product - mix problem.
Objective function :
Maximize z = 2x1 + 5x2 + 8x3 + 0.s1 + 0.s2 + 0.s3
subject to the constraints
6x1 + 8x2 + 4x3 < 96 (hours, Department I)
2x1 + x2 + 2x3 < 40 (hours, Department II)
5x1 + 3x2 + 2x3 < 60 (hours, Department III)
x1, x2, x3 > 0
FINAL SIMPLEX TABLEAU
Basic Profit Quantity 2 5 8 0 0 0
Variable Per X1 X2 X3 S1 S2 S3
Unit
X2 5 8/3 1/3 1 0 1/6 -1/3 0
X3 8 56/3 5/6 0 1 -1/12 2/3 0
S3 0 44/3 7/3 0 0 -1/3 -1/3 1
Zj 25/3 5 8 1/6 11/3 0 ଶ
162
ଷ
Cj - Zj -19/3 0 0 -1/6 -11/3 0
(i) Write the optimum product mix and the profit contribution shown by the above solution.
(ii) Is this solution feasible? Why? Given brief reason(s).
(iii)Does the problem have any alternative optimum solution? If, so show one such
solution.
(iv) Indicate the shadow prices of three departments.
(v) If the company wishes to expand the production capacity, which of the three
departments should be given priority.
(vi) If the customer is prepared to pay higher prices for x1 how much should price being
increased so that companies profit remain unchanged?

:2: REVISION NOTES – MAY ‘19

J. K. SHAH CLASSES FINAL C.A. - COSTING
PART B : GRAPHICAL METHOD
Q.1. Solve the following L.P.P. by the graphical method.
Maximize Z = 8x1 + 16x2
Subject to : x1 + x2 < 200
x2 < 125
3x1 + 6x2 < 900
x1 , x2 > 0

Q.2. An advertising firm desires to reach two types of audiences - customers with annual income
of more than ` 40,000 (target audience A) and customers with annual income of less than `
40,000 (target audience B). The total advertising budget is ` 2,00,000. One programme of
T.V. advertising costs ` 50,000 and one programme of Radio advertising costs ` 20,000.
Contract conditions ordinarily require that there should be at least 3 programmes on T.V.
and the number of programmes on Radio must not exceed 5. Survey indicates that a single
T.V. programme reaches 7,50,000 customers in target audience A and 1,50,000 in target
audience B. One Radio programme reaches 40,000 customers in target audience A and
2,60,000 in target audience B.
Formulate this as a linear programming problem and determine the media mix to maximize
the total reach using graphic method.

:3: REVISION NOTES – MAY ‘19