Machine A Machine B

25.9 29.6 1. A process consists of two machines that make the same chemical and run at
industrial engineer has sampled the machines' output in gallons per hour, and rec
20.7 29.2 columns A and B. Calculate the following statistics for each mach
21.6 31.6
26.3 29.6
27.7 34.9 Machine A Machine B
22.9 30.1 Maximum Observed 28.8 34.9
22.0 28.5 Minimum Observed 20.7 20.6
24.4 25.9 Observed Range 8.1 14.3
26.0 32.1 Median 25.5 29.2
21.4 26.8 Interquartile Range 2.75 5.00
25.4 29.5
25.9 26.6
2. Assuming the data are normally distributed, calulcate the following
24.3 22.1
23.4 29.8
26.3 22.2 Machine A Machine B
23.1 20.6 Arithmetic Average 24.9 28.6
25.6 29.2 Sample Standard Deviation 2.04 3.51
23.4 32.3 Max Expected Value 31.0 39.1
25.9 33.3 Min Expected Value 18.8 18.1
28.0 26.5 60% of the values are expected to
24.8 27.5 fall below what production rate?
(Hint find how many SDs cover 25.4 29.5
26.2 26.3 60% of data & use function
24.9 24.7 NORMINV)
25.2 29.0
28.8 31.6
3. Construct a histogram below with 5 bins for the Machine A outpu
26.0 32.3
26.2 33.3
27.2 25.7
25.5 26.6
22.3 31.3
4. What is the artithmetic average and sample standard deviation for combined ga
of both machines?

Entire Process
Arithmetic Average 53.5
Sample Standard Deviation 4.05
 5. Assume you have a process consisting of 5 machines in a series (i.e. parts flow
me chemical and run at the same time. An machine has a reject rate identified below. You need 1,000 finished parts out of
gallons per hour, and recorded her findings in 1,
g statistics for each machine:

Machine #1 Machine #2
Raw Parts In
Reject Rate Reject Rate

2.3% 1.1%

, calulcate the following statistics:

Assume Max & Min values capture

99.7% of the population ie. 3
Sigma

for the Machine A output data:

eviation for combined gallons per hour output
es?
 in a series (i.e. parts flow out of machine #1 into machine #2, then out of machine #2 into machine #3, etc.) Each
,000 finished parts out of Machine #5. How many parts need to start the process into Machine #1 to produce the
1,000 parts?

Machine #3 Machine #4 Machine #5 Finished Parts

Reject Rate Reject Rate Reject Rate Out

5.7% 0.9% 1.9% 1,000

Furniture Problem

A furniture manufacturer wants to produce two products ie. Chairs & Tables. Resources available are Wood and

Resource \ Products Units Chair Table Max available

Wood reqd cft / unit 5 20 400
Manhours required hours/ unit 10 15 450
Profit Rs./unit 450 800 -

What is the optimal mix of Chairs & Tables to maximise total Profit?

5X1+20X2 <= 400

10X1 + 15X2 <= 450
X1,X2 >= 0

X1 X2 5X1+20X2 10X1 + 15X2 <= 400

0 50 1000 750
5 45 925 725
10 40 850 700
15 35 775 675
20 30 700 650
25 25 625 625
30 20 550 600
35 15 475 575
40 10 400 550
41 9 385 545
42 8 370 540
43 7 355 535
44 6 340 530
45 5 325 525
46 4 310 520
47 3 295 515
48 2 280 510
49 1 265 505
50 0 250 500
Resources available are Wood and Man Hours with following levels.

1 + 15X2 <= 400

Furniture Problem

A furniture manufacturer wants to produce two products ie. Chairs & Tables. Resources available are Wood and

Resource \ Products Units Chair Table Max available

Wood reqd cft / unit 5 20 400
Manhours required hours/ unit 10 15 450
Profit Rs./unit 450 800 -

What is the optimal mix of Chairs & Tables to maximise total Profit?

Let no of Chairs be X1 & Tables X2 X1 Chairs X2 Tables

Decision Variables # Units 24 14
Profits / Unit Rs./unit 450 800
Objective: To maximise Total profit Rs. 22000
Actual Constraint
Constraints Wood 400 400
Man Hours 450 450
Resources available are Wood and Man Hours with following levels.
Linear Programming Examples
Raw Materials for products A,B & C
Multipurpose plant is used to manufacture three products A, B and C from raw materials Y and Z.
Amount of raw materials required, batch times and profits per batch are shown as below.
Determine number of batches to be processed for each product to mazimize the profit. Plant
is operating for 150 hours per week. Raw material available per week is Y : 216 units and Z :
200 units.

Plant time per batch Raw material per Batch

Product Profit per Batch
(hrs) Y Z
A 30 5 18 20
B 8 10 12 5
C 15 20 5 10
Linear Programming Examples
Bell Refinery Production Schedule:
*Bell refinery has 5 products & lube (P5 is created along with P4).
*Each product require 4 crude oils barrels (bbl) as given below.
*However, constraints are :
1)Demand for each of these crude oils also has maximum limits.
2)Supply also maximum limits for supply of these crude types.
3)Each bbl of crude has a value ie. profits per barrel (bbl).
4)Each crude type has cost and operating costs are given below.
What is the optimum requirement per monthly of each crude oils to maximize the refinery profit.

Product Yield bbl / bbl crude Crude Value Max Demand

Crudes Products-> P1 P2 P3 P4 P5 $/bbl bbl/wk
Gasoline 0.6 0.5 0.3 0.4 0.4 45 170
Heating Oil 0.2 0.2 0.3 0.3 0.1 30 85
Jet Fuel 0.1 0.2 0.3 0.2 0.2 15 85
Lube Oil 0 0 0 0 0.2 60 20
Losses -0.1 -0.1 -0.1 -0.1 -0.1 - -
Crude Cost $/bbl 15 15 15 25 25
Operating Cost $/bbl 5 8.5 7.5 3 2.5
Crude Supply kbbl/mnth 100 100 100 200
Linear Programming Examples
Transpotation problem:

A company has three plants that supply the needs of four cities. Each plant can supply the following numbers o
35 million; plant B-50 million; plant C-40 million (see Table below). The demands in these cities are as follows: c
city 2-20 million; city 3-30 million; and city 4-30 million. The costs of sending 1 unit from the plant to the city de
distance that must be travelled and is given below. Formulate an LPP to minimize the cost of meeting each city
the plants' available capacities.

Table showing Shipping Unit Costs, Supply & Demand

Plant \ CityC C1 C2 C3 C4 Supply (mil)
A 8 6 10 9 35
B 9 12 13 7 50
C 14 9 16 5 40
Demand 45 20 30 30
 an supply the following numbers of units: plant A-
ands in these cities are as follows: city 1-45 million;
1 unit from the plant to the city depend on the
mize the cost of meeting each city's demand with
The management team at the Harkins Ceramic Company are trying to determine the optimum number of products to ma
their profits. They manufacture two products: a birdbath and a large planter. Each product passes sequentially through th
Shaping, Painting and Firing. The profit margin and hours required in each department are listed in the tab

Birdbath Large Planter

Shaping 5.00 1.75
Painting 1.50 1.00 Labor hours required per piece
Firing 1.00 2.50
Profit Margin / Unit $50.00 $25.00

The three departments are limited to a maximum number of labor hours each can work in a given month as shown i

Labor Hours
Available per
Month

Shaping 500
Painting 180
Firing 250

What is the optimal number of birdbaths and large planters Harkins Ceramics should make each month to maximze their p
maximum profit?

Birdbath Large Planter

Qty per Month

Hours Required Each Month Total Hours

Shaping
Painting
Firing

Profit Margin / Unit

Profit per Product
Total Profit
he optimum number of products to make in order to maximize
product passes sequentially through the same 3 departments:
n each department are listed in the table below:

Labor hours required per piece

h can work in a given month as shown in the table below:

d make each month to maximze their profits? And what is that

Labor Hours
Available
500
180
250
 Demand Parameters
Supply
Parameters
Demand (Sales) Quantity in Last 12 Months

Item Average Lead

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Number time in Days

A0000001 38 800 530 671 632 1200 667 606 653 549 900 1300 700
A0000002 48 179 248 235 265 247 192 240 192 203 210 269 175
A0000003 47 408 245 175 467 345 208 241 151 468 370 495 328
A0000004 50 511 388 512 237 471 312 217 540 376 442 171 164
A0000005 56 260 181 311 190 369 224 200 499 542 433 458 478
A0000006 49 235 257 533 303 431 411 414 378 433 301 367 181
A0000007 61 345 290 299 296 519 310 321 259 372 298 358 219
A0000008 57 548 199 239 529 522 354 196 291 374 507 541 431
A0000009 49 504 286 352 501 554 497 224 263 340 284 334 313
A0000010 52 372 263 405 473 286 249 468 468 353 240 392 416
A0000011 52 233 175 513 259 411 218 185 301 541 278 342 248
A0000012 50 248 272 279 154 339 231 428 158 480 424 549 389

Safety Stock = Service Factor (z) * SD of Monthly demand * SQRT(Lead time in months)
Reorder Point =(Avg Daily Demand x Avg Lead Time in days )+ Safety Stock
EOQ = SQRT(2DO/H) D is Annual Demand Qty
O is Ordering Cost per Unit
H is holding cost per Unit
Min = Avg Daily Demand x Avg LEadTime
Max1 = Min + Min / Ordering Freq)
Service level Cost
parameter parameters

Average Std. Deviation of Average Lead Service

Expected Standard cost Yearly
monthly Monthly time in Level Factor
Service Levels $ demand
demand Demand Months (Z)

92% 218 9208 767 248 1.3 1.41

92% 198 2655 221 33 1.6 1.41
92% 147 3901 325 120 1.6 1.41
92% 324 4341 362 138 1.7 1.41
92% 261 4145 345 134 1.9 1.41
92% 291 4244 354 100 1.6 1.41
92% 151 3886 324 74 2.0 1.41
92% 253 4731 394 137 1.9 1.41
95% 140 4452 371 112 1.6 1.64
95% 156 4385 365 87 1.7 1.64
95% 339 3704 309 121 1.7 1.64
95% 280 3951 329 126 1.7 1.64
 = (Std dev of
monthly demand) X
=(Average daily demand X =(Average daily
(Square root of =sqrt (Demand X Ordering cost/
Average Lead time)+Safety demand X Average Hypothetical
Lead time) X Z holding cost)
Stock Lead time
Value for Service
Level

Safety Stock ROP (For Safety stock

EOQ Min Max
Method 1 formula)

390 1350 264 959 1199

59 409 149 350 438
213 725 209 513 641
252 859 149 607 758
256 897 162 640 800
181 758 155 578 722
149 807 206 657 822
268 1021 176 753 941
236 847 229 611 764
188 820 215 632 790
261 795 134 534 667
267 812 153 545 682