Linear Programming Models: Graphical and

C H A P T E R
7
Computer Methods

TEACHING SUGGESTIONS model). Here, the issue is the source of data. When accountants tell
you a profit contribution is $8.50 per unit, is that figure accurate
Teaching Suggestion 7.1: Draw Constraints for a
within 10% or within 10¢? The solution to an LP problem can
Graphical LP Solution.
change dramatically if the input parameters are not exact. Mention
Explain constraints of the three types (, , ) carefully the first
that sensitivity analysis also has other names, such as right-hand-
time you present an example. Show how to find the X1, X2 inter-
side ranging, post-optimality analysis, and parametric programming.
cepts so a straight line can be drawn. Then provide some practice
in determining which way the constraints point. This can be done
by picking a few X1, X2 coordinates at random and indicating ALTERNATIVE EXAMPLES
which direction fulfills the constraints. Alternative Example 7.1: Hal has enough clay to make 24
Teaching Suggestion 7.2: Feasible Region Is a Convex Polygon. small vases or 6 large vases. He only has enough of a special glaz-
Explain Dantzing’s discovery that all feasible regions are convex ing compound to glaze 16 of the small vases or 8 of the large
(bulge outward) polygons (many-sided figures) and that the opti- vases. Let X1  the number of small vases and X2  the number of
mal solution must lie at one of the corner points. Draw both con- large vases. The smaller vases sell for $3 each, while the larger
vex and concave figures to show the difference. vases would bring $9 each.
Teaching Suggestion 7.3: Using the Iso-Profit Line Method. (a) Formulate the problem.
This method can be much more confusing than the corner point ap- (b) Solve graphically.
proach, but it is faster once students feel comfortable drawing the SOLUTION:
profit line. Start your first line at a profit figure you know is lower (a) Formulation
than optimal. Then draw a series of parallel lines, or run a ruler paral-
OBJECTIVE FUNCTION:
lel, until the furthest corner point is reached. See Figures 7.6 and 7.7.
Maximize $3X1  $9X2
Teaching Suggestion 7.4: QA in Action Boxes in the LP Chapters.
There are a wealth of motivating tales of real-world LP applica- Subject to: Clay constraint: 1X1  4X2  24
tions in Chapters 7–9. The airline industry in particular is a major Glaze constraint: 1X1  2X2  16
LP user. (b) Graphical solution
Teaching Suggestion 7.5: Feasible Region for the
Minimization Problem. 15
Students often question the open area to the right of the constraints
in a minimization problem such as that in Figure 7.10. You need
to explain that the area is not unbounded to the right in a mini-
mization problem as it is in a maximization problem.
X2 = Number of Large Vases

Teaching Suggestion 7.6: Infeasibility.

10
This problem is especially common in large LP formulations since
many people will be providing input constraints to the problem. (0, 8)
This is a real-world problem that should be expected. Glaze Constraint
Teaching Suggestion 7.7: Alternative Optimal Solutions. (0, 6)
This issue is an important one that can be explained in a positive B
way. Managers appreciate having choices of decisions that can be 5 (8, 4) Clay Constraint
made with no penalty. Students can be made aware that alternative
C
optimal solutions will arise again in the transportation model, as-
signment model, integer programming, and the chapter on net- Feasible Region
work models. A (24, 0)
Teaching Suggestion 7.8: Importance of Sensitivity Analysis. (0, 0) D (16, 0)
0
Sensitivity analysis should be stressed as one of the most important 0 5 10 15 20 25
LP issues. (Actually, the issue should arise for discussion with every X1 = Number of Small Vases

85
86 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS

Point X1 X2 Income plied to minimization problems. Conceptually, isoprofit and iso-

cost are the same.
A 0 0 $0
The major differences between minimization and maximiza-
B 0 6 54
tion problems deal with the shape of the feasible region and the di-
C 8 4 60*
D 16 0 48 rection of optimality. In minimization problems, the region must
be bounded on the lower left, and the best isocost line is the one
*Optimum income of $60 will occur by making and sell- closest to the zero origin. The region may be unbounded on the top
ing 8 small vases and 4 large vases. and right and yet be correctly formulated. A maximization prob-
Draw an isoprofit line on the graph on page 85 from (20, 0) to lem must be bounded on the top and to the right. The isoprofit line
(0, 6X\c) as the $60 isoprofit line. yielding maximum profit is the one farthest from the zero origin.
Alternative Example 7.2: A fabric firm has received an order 7-2. The requirements for an LP problem are listed in Section
for cloth specified to contain at least 45 pounds of cotton and 25 7.2. It is also assumed that conditions of certainty exist; that is, co-
pounds of silk. The cloth can be woven out on any suitable mix of efficients in the objective function and constraints are known with
two yarns, A and B. Material A costs $3 per pound, and B costs $2 certainty and do not change during the period being studied. An-
per pound. They contain the following proportions of cotton and other basic assumption that mathematically sophisticated students
silk (by weight): should be made aware of is proportionality in the objective func-
tion and constraints. For example, if one product uses 5 hours of a
Yarn Cotton (%) Silk (%) machine resource, then making 10 of that product uses 50 hours of
machine time.
A 30 50
LP also assumes additivity. This means that the total of all ac-
B 60 10
tivities equals the sum of each individual activity. For example, if
the objective function is to maximize P  6X1  4X2, and if X1 
What quantities (pounds) of A and B yarns should be used to mini-
X2  1, the profit contributions of 6 and 4 must add up to produce
mize the cost of this order?
a sum of 10.
Objective function: min. C  3A  2B
7-3. Each LP problem that has been formulated correctly does
Constraints: 0.30A  0.60B  45 lb (cotton) have an infinite number of solutions. Only one of the points in the
0.50A  0.10B  25 lb (silk) feasible region usually yields the optimal solution, but all of the
Simultaneous solution of the two constraint equations reveals that points yield a feasible solution. If we consider the region to be
A  39 lb, B  55 lb. continuous and accept noninteger solutions as valid, there will be
The minimum cost is C  $3A  $2B  3(39)  (2)(55)  an infinite number of feasible combinations of X1 and X2.
$227. 7-4. If a maximization problem has many constraints, then it can
be very time consuming to use the corner point method to solve it.
300 Such an approach would involve using simultaneous equations to
solve for each of the feasible region’s intersection points. The iso-
profit line is much more effective if the problem has numerous con-
250 straints.
7-5. A problem can have alternative optimal solutions if the
isoprofit or isocost line runs parallel to one of the problem’s con-
200
Pounds of Yarn B

straint lines (refer to Section 7-8 in the chapter).

7-6. This question involves the student using a little originality
150 to develop his or her own LP constraints that fit the three condi-
tions of (1) unboundedness, (2) infeasibility, and (3) redundancy.
These conditions are discussed in Section 7.8, but each student’s
100 graphical displays should be different.
min C 7-7. The manager’s statement indeed had merit if the manager
50 understood the deterministic nature of linear programming input
data. LP assumes that data pertaining to demand, supply, materi-
als, costs, and resources are known with certainty and are constant
during the time period being analyzed. If this production manager
50 100 150 200 250 operates in a very unstable environment (for example, prices and
Pounds of Yarn A availability of raw materials change daily, or even hourly), the
model’s results may be too sensitive and volatile to be trusted. The
SOLUTIONS TO DISCUSSION QUESTIONS AND PROBLEMS application of sensitivity analysis might be trusted. The applica-
7-1. Both minimization and maximization LP problems employ tion of sensitivity analysis might be useful to determine whether
the basic approach of developing a feasible solution region by LP would still be a good approximating tool in decision making.
graphing each of the constraint lines. They can also both be solved 7-8. The objective function is not linear because it contains the
by applying the corner point method. The isoprofit line method is product of X1 and X2, making it a second-degree term. The first,
used for maximization problems, whereas the isocost line is ap- second, fourth, and sixth constraints are okay as is. The third and
 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS 87

fifth constraints are nonlinear because they contain terms to the Let: X1  number of air conditioners to be produced
second degree and one-half degree, respectively. X2  number of fans to be produced
7-9. For a discussion of the role and importance of sensitivity Maximize profit  25X1  15X2
analysis in linear programming, refer to Section 7.9. It is needed
subject to 3X1  2X2  240 (wiring)
especially when values of the technological coefficients and con-
tribution rates are estimated—a common situation. When all 2X1  1X2  140 (drilling)
model values are deterministic, that is, known with certainty, sen- X1, X2  0
sitivity analysis from the perspective of evaluating parameter ac-
Profit at point a (X1  0, X2  0)  $0
curacy may not be needed. This may be the case in a portfolio se-
lection model in which we select from among a series of bonds Profit at point b (X1  0, X2  120)
whose returns and cash-in values are set for long periods.  25(0)  (15)(120)  $1,800
7-10. Sensitivity analysis is important in all quantitative model- Profit at point c (X1  40, X2  60)
ing techniques. Especially common is the analysis of inventory  25(40)  (15)(60)  $1,900
model results in which we test the model’s sensitivity to changes
Profit at point d (X1  70, X2  0)
in demand, lead time, cost, and so on.
 25(70)  (15)(0)  $1,750
7-11. The computer is valuable in (1) solving LP problems
quickly and accurately; (2) solving large problems that might take The optimal solution is to produce 40 air conditioners and 60 fans
days or months by hand; (3) performing extensive sensitivity during each production period. Profit will be $1,900.
analysis automatically; and (4) allowing a manager to try several 7-15.
ideas, models, or data sets.
140
7-12. The student is to create his or her own data and LP formula-
tion. (a) The meaning of the right-hand-side numbers (resources) is
to be explained. (b) The meaning of the constraint coefficient (in 120
terms of how many units of each resource that each product re-
quires) is also to be explained. (c) The problem is to be solved
graphically. (d) A simple sensitivity analysis is to be conducted by 100
changing the contribution rate (Cj value) of the X1 variable. For ex- (26.67, 80)
ample, if C1 was $10 as the problem was originally formulated, the
b
student should resolve with a $15 value and compare solutions. 80
e
7-13. A change in a technological coefficient changes the feasi- X2
ble solution region. An increase means that each unit produced re- c Optimal Solution
quires more of a scarce resource (and may lower the optimal 60
profit). A decrease means that because of a technological advance-
ment or other reason, less of a resource is needed to produce 1
40
unit. Changes in resource availability also change the feasible re-
gion shape and can increase or decrease profit.
Feasible
7-14. 20 Region

140
a d
0
b 0 20 40 60 80 100 120
120 X1

Drilling Constraint Maximize profit  25X1  15X2

100
subject to 3X1  2X2  240
Number of Fans, X2

2X1  1X2  140

80 Optimal Solution X1  20
(X1 = 40, X2 = 60) X2  80
c X1, X2  0
60
Profit at point a (X1  20, X2  0)
 25(20)  (15)(0)  $500
40
Wiring Profit at point b (X1  20, X2  80)
Feasible Region Constraint
 25(20)  (15)(80)  $1,700
20

a d
0
0 20 40 60 80 100 120
Number of Air Conditioners, X1
88 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS

Profit at point c (X1  40, X2  60) 300

 25(40)  (15)(60)  $1,900
Profit at point d (X1  70, X2  0)
250
 25(70)  (15)(0)  $1,750
Profit at point e (X1  26.67, X2  80)
 25(26.67)  15(80)  $1,867 200
Hence, even though the shape of the feasible region changed from
Problem 7-14, the optimal solution remains the same.
7-16. X2 150

300
a
100
Optimal Solution,
250 $2862.50 Profit
50
a Feasible Region b
200

0 c
0 50 100 150 200 250 300 350 400
X2 150 b X1

7-18.
100
60
X1 + X2 = 60
Feasible
50 Region
50

Feasible
c Region
0 40
0 50 100 150 200 250 300 350
X1
X2 30 b
X2 = 20
X1  number of model A tubs produced
X2  number of model B tubs produced 20
a Optimal
Maximize profit  90X1  70X2
Solution
subject to 125X1  100X2  25,000 (steel) X1 = 30
10
20X1  30X2  6,000 (zinc)
X1, X2  0
Profit at point a (X1  0, X2  200)  $14,000 0
0 10 20 30 40 50 60
Profit at point b (X1  85.71, X2  142.86)  $17,714.10 X1
Profit at point c (X1  200, X2 = 0)  $18,000
a

X1  number of undergraduate courses

optimal solution
X2  number of graduate courses
7-17. X1  number of benches produced
Minimize cost  $2,500X1  $3,000X2
X2  number of tables produced
Maximize profit  $9X1  $20X2 subject to X1  30
X2  20
subject to 4X1  6X2  1,200 hours
X1  X2  60
10X1  35X2  3,500 pounds
Total cost at point a  (X1  40, X2  20)
X1, X2  0
 2,500(40)  (3,000)(20)
Profit at point a (X1  0, X2  100)  $2,000
 $160,000
Profit at point b (X1  262.5, X2  25)  $2,862.50
Profit at point c (X1  300, X2  0)  $2,700
 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS 89

Total cost at point b  (X1  30, X2  30) 60

 2,500(30)  (3,000)(30)
 $165,000
Point a is optimal.
7-19. a
40
40

X2 b Feasible
Region
Optimal
Solution
30
20
Optimal Solution

a Feasible Region is
Heavily Shaded Line
X2 20

0 c
b 0 20 40 60
X1
10
7-21.

250,000
X1 + X2 = 100,000
0
0 10 20 30 40
X1 200,000
X1 = 125,000

X1  number of Alpha 4 computers

X2  number of Beta 5 computers 150,000
Maximize profit  $1,200X1  $1,800X2 X2 X2 = 100,000

subject to 20X1  25X2  800 hours a

100,000
(total hours  5 workers Feasible
 160 hours each) Region
is this Line
X1  10
50,000
X2  15
Corner points: a(X1  10, X2  24), profit  $55,200
b(X1  2114, X2  15), profit  $52,500 b
0
0 50,000 100,000 150,000 200,000 250,000
Point a is optimal.
X1
7-20. Let: X1  number of pounds of compost in each bag
X1  $ invested in Treasury notes
X2  number of pounds of sewage waste in each bag
X2  $ invested in bonds
Minimize cost  5X1  4X2 (in cents)
Maximize ROI  0.08X1  0.09X2
subject to X1  X2  60 (pounds per bag)
X1  $125,000
X1  30 (pounds compost per bag)
X2  $100,000
X2  40 (pounds sewage per bag)
X1  X2  $250,000
Corner point a:
X1, X2  0
(X1  30, X2  40) ⇒ cost  5(30)  (4)(40)  $3.10
Point a (X1  150,000, X2  100,000), ROI  $21,000
a

Corner point b:
optimal solution
(X1  30, X2  30) ⇒ cost  5(30)  (4)(30)  $2.70
Point b (X1  250,000, X2  0), ROI  $20,000
Corner point c:
(X1  60, X2  0) ⇒ cost  5(60)  (4)(0)  $3.00
90 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS

7-22. 7-23. Point a lies at intersection of constraints (see figure below):

3X1  2X2  120
X1  3X2  90
50
Multiply the second equation by 3 and add it to the first (the
5X1 + 3X2 ≤ 150 method of simultaneous equations):
3X1  2X2  120
40
Isoprofit Line Indicates 3X1  9X2  270
that Optimal Solution  7X2  150 ⇒ X2  21.43 and X1  25.71
Lies at Point a
Cost  $1X1  $2X2  $1(25.71)  ($2)(21.43)
30
 $68.57
X2 (X1 = 18 43 , X2 = 18 43 , Profit = $150)
7-24. X1  $ invested in Louisiana Gas and Power
20 X1 – 2X2 ≤ 10
X2  $ invested in Trimex Insulation Co.
a
Minimize total investment  X1  X2
Feasible subject to $0.36X1  $0.24X2  $720
Region 3X1 + 5X2 ≤ 150
10 $1.67X1  $1.50X2  $5,000
0.04X1  0.08X2  $200
Investment at a is $3,333.
0 Investment at b is $3,179. k optimal solution
0 10 20 30 40 50
X1 Investment at c is $5,000.
Short-term growth is $927.27.
Intermediate-term growth is $5,000.
Note that this problem has one constraint with a negative sign.
This may cause the beginning student some confusion in plotting Dividends are $200.
the line. See graph on page 91.

Figure for Problem 7-23.

80
8X1 + 2X2 ≥ 160 X2 ≤ 70

60

Feasible Region

X2 40
Iso
cos
t Li
ne
=$
100
=1
X
1 +2
20 a X
2

X1 + 3X2 ≥ 90
3X1 + 2X2 ≥ 120

0
0 20 40 60 80 100
X1 Isoprofit Line Indicates
That Optimal Solution
Lies At Point a
 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS 91

Figure for Problem 7-24.

4,000

a(X1 = 0, X2 = 3,333)

3,000 Feasible Region

X2 2,000 b(X1 = 1,359, X2 = 1,818.18)

1,000
c (X1 = 5,000, X2 = 0)

0
0 1,000 2,000 3,000 4,000 5,000
X1

7-25. Point c (X1  25, X2  20), exposure  875,000

 400,000
3,000X1 + 1,250X2 ≤ 100,000
80  1,275,000
X1 ≥ 5 X1 ≤ 25 Point d (X1  25, X2  10), exposure  875,000
b
Optimal Exposure
 200,000
60 Rating  1,075,000
7-26. Let: X1  number of barrels of pruned olives
X2  number of barrels of regular olives
X2 40 Maximize profit  $20X1  $30X2
subject to 5X1  2X2  250 (labor hours)
Feasible Region 1X1  2X2  150 (acres)
X2 ≥ 10
20 c
X1  40 (barrels)
X1, X2  0
a d
a. Corner point a  (X1  0, X2  0), profit  0
0
0 5 10 15 20 25 30 35 Corner point b  (X1  0, X2  75), profit  $2,250
X1 Corner point c  (X1  25, X2  62Z\x), profit 
$2,375 k optimal profit
Let: X1  number of TV spots
Corner point d  (X1  40, X2  25), profit  $1,550
X2  number of newspaper ads
Corner point e  (X1  40, X2  0), profit  $800
Maximize exposures  35,000X1  20,000X2
b. Produce 25 barrels of pruned olives and 62Z\x barrels
subject to 3,000X1  1,250X2  $100,000 of regular olives.
X1 5 c. Devote 25 acres to pruning process and 125 acres to
X1  25 regular process.
X2  10
Point a (X1  5, X2  10), exposure  375,000
(optimal)
Point b (X1  5, X2  68), exposure  175,000
 1,360,000
 1,535,000
92 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS

125 X1  2X2  2 line—this is also on the same slope as the isoprofit

line X1  2X2 and hence there will be more than one optimal solu-
tion.
100 As a matter of fact, every point along the heavy line will pro-
vide an “alternate optimum.”
b Formulation 3:
75
X2 c 5
Optimal Solution

50 Unbounded Region

4
Feasible d
25 Region
3
a e
0 X2
0 25 50 75 100 125 150
X1 2

7-27. 1
Formulation 1:

8 0
0 1 2 3 4 5 6
X1

6 Formulation 4:
Infeasible
Solution
8
Region
X2 4

6
2

X2 4
0
0 2 4 6 8 10 12 Feasible Region
X1
2
1
Formulation 2:
0
0 1 2 3 4 6 8 10 12
2
X1

Formulation 4 appears to be proper as is. Note that the constraint

4X1  6X2  48 is redundant.

X2 1

Line For X1 + 2X2

Feasible
Region

0
0 1 2 3
X1
 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS 93

7-28. Using the isoprofit line or corner point method, we see that 8
point b (where X1  37.5 and X2  75) is optimal if the profit
 $3X1  $2X2. If the profit changes to $4.50 per unit of X1, the
optimal solution shifts to point c. If the objective function be-
comes P  $3X1  $3X2, the corner point b remains optimal. 6

150
Profit Line for 3X1 + 3X2 Profit = 4X1 + 6X2 = $21.71

X2 4

Optimal solution at
a Profit Line for 4.50X1 + 2X2
100 X1 = 26/7, X2 = 15/7
2
1X1 + 3X2 = 8
X2
b

50 0
Profit Line for 0 2 4 6 8
3X1 + 2X2
X1

7-30. a.
100
c
0
0 50 100 150
X1

7-29. The optimal solution of $26 profit lies at the point X1  2, 75

X2  3. Isoprofit Line for
1X1 + 1X2 = $66.67
8
a
X2 50
(X 1 = 331/3, X2 = 331/3 )
6 b
25

X2 4
c
0
Profit = 4X1 + 6X2 = $26 0 25 50 75 100
X1
2

0
0 2 4 6 8
X1

If the first constraint is altered to 1X1  3X2  8, the feasible re-

gion and optimal solution shift considerably, as shown in the next
column.
94 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS

b. 7-32.
150 12

10
Isoprofit Line for
3X1 + 1X2 = $150
100 8
6X1 + 4X2 = 36

X2 X2 6

(X 1 = 5, X2 = 11/2 ; Profit = $29 )

50 4

2 1X1 + 2X2 = 8
Optimal Solution is
Now Here

0 0
0 50 100 150 0 2 4 6 8 10 12
X1 X1

Using the corner point method, we determine that the optimal so-
c. If X1’s profit coefficient was overestimated, but should
lution mix under the new constraint yields a $29 profit, or an in-
only have been $1.25, it is easy to see graphically that
crease of $3 over the $26 profit calculated.
the solution at point b remains optimal.
7-33. Let: X1  number of coconuts carried
7-31.
X2  number of skins carried
100
Maximize profit  60X1  300X2 (in rupees)
subject to 5X1  15X2  300 pounds
1
8 X1  1X2  15 cubic feet
75 X 1, X 2  0
At point a: (X1  0, X2  15), P  4,500 rupees
At point b: (X1  24, X2  12), P  1,440  3,600
 5,040 rupees
X2 50 (X
1 = 426/7, X2 = 142/7; Profit = $571/7 ) At point c: (X1  60, X2  0), P  3,600 rupees
The three princes should carry 24 coconuts and 12 lions’ skins.
This will produce a wealth of 5,040 rupees.
25 20
Optimal Solution
Remains at
b Point b

0 a
0 25 50 75 100 15
Number of Lion Skins, X2

X1 Optimal Solution

b
The optimal solution is at point b, but profit has decreased from 10
$6623 to $5717, and the solution has changed considerably.

Feasible
5 Region

c
0
0 30 60 90 120
Number of Coconuts, X1
 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS 95

7-34. a. Let: X1  number of pounds of stock X purchased per 0.2X1  0.4X2  0.1X3  0.2X4  26,000 (hours of assembly
cow each month time available)
X2  number of pounds of stock Y purchased per 0.5X1  0.1X2  0.5X3  0.5X4  1,200 (hours of inspection
cow each month time)
X3  number of pounds of stock Z purchased per X1  150 (units of XJ201)
cow each month
X2  100 (units of XM897)
Four pounds of ingredient Z per cow can be transformed to:
X3  300 (units of TR29)
4 pounds  (16 oz/lb)  64 oz per cow
X4  400 (units of BR788)
5 pounds  80 oz
7-36. Maximize Z  [220  (0.45)(220)  44  20]X1
1 pound  16 oz  [175  (0.40)(175)  30  20]X2
8 pounds  128 oz  57X1  55X2
3X1  2X2  4X3  64 (ingredient A requirement) Constraints:
2X1  3X2  1X3  80 (ingredient B requirement) X1  X2  390 production limit
1X1  0X2  2X3  16 (ingredient C requirement) 2.5X1  2.4X2  960 labor hours
6X1  8X2  4X3  128 (ingredient D requirement) Corner points:
X3  5 (stock Z limitation) X1  384, X2  0, profit  $21,888
Minimize cost  $2X1  $4X2  $2.50X3 X1  0, X2  390, profit  $21,450
b. Cost  $80 X1  240, X2  150, profit  $21,930
X1  40 lbs. of X Students should point out that those three options are so close in
X2  0 lbs. of Y profit that production desires and sensitivity of the RHS and cost
X3  0 lbs. of Z coefficient are important issues. This is a good lead-in to the dis-
cussion of sensitivity analysis. As a matter of reference, the
7-35. Let: X1  number units of XJ201 produced right-hand side ranging for the first constraint is a production
X2  number units of XM897 produced limit from 384 to 400 units. For the second constraint, the hours
X3  number units of TR29 produced may range only from 936 to 975 without affecting the solution.
The objective function coefficients, similarly, are very sensi-
X4  number units of BR788 produced
tive. The $57 for X1 may increase by 29 cents or decrease by $2.
Maximize profit  9X1  12X2  15X3  11X4 The $55 for X2 may increase by $2 or decrease by 28 cents.
subject to 7-37. a. Let: X1  number of MCA regular modems made and
0.5X1  1.5X2  1.5X3  0.1X4  15,000 (hours of wiring sold in November
time available) X2  number of MCA intelligent modems made
0.3X1  0.1X2  0.2X3  0.3X4  17,000 (hours of drilling and sold in November
time available) Data needed for variable costs and contribution margin (refer to
the table on the bottom of this page):

Table for Problem 7-37(a)

MCA REGULAR MODEM MCA INTELLIGENT MODEM
Total Per Unit Total Per Unit
Net sales $424,000 $47.11 $613,000 $58.94
Variable costsa
Direct labor 60,000 6.67 76,800 7.38
Indirect labor 9,000 1.00 11,520 1.11
Materials 90,000 10.00 128,000 12.31
General expenses 30,000 3.33 35,000 3.37
Sales commissions $231,000 $23.44 $360,000 $25.76
Total variable costs $220,000 $24.44 $311,320 $29.93
Contribution margin $204,000 $22.67 $301,680 $29.01
a
Depreciation, fixed general expense, and advertising are excluded from the calculations.
96 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS

Hours needed to produce each modem: Solution: Produce:

5,000 hours 1,100 units of W75C—backorder 300 units
MCA regular   0.555 hour/modem
9,000 modems 250 units of W33C—backorder 0 units
10,400 hours
MCA intelligent   1.0 hour/modem 0 units of W5X—backorder 1,510 units
10,400 modems
600 units of W7X—backorder 516 units
Maximize profit  $22.67X1  $29.01X2
Maximized profit will be $59,900. By addressing quality problems
subject to 0.555X1  1.0X2  15,400 (direct labor hours) listed earlier, we could increase our capacity by up to 3% reducing
X2  8,000 (intelligent modems) our backorder level.
b. 2. Bringing in temporary workers in the Drawing Department
would not help. Drawing is not a binding constraint. However, if
X2 these former employees could do rework, we could reduce our re-
work inventory and fill some of our backorders thereby increasing
15,400
profits. We have about a third of a month’s output in rework inven-
tory. Expediting the rework process would also free up valuable cash.
P = $534,339 3. The plant layout is not optimum. When we install the new equip-
ment, an opportunity for improving the layout could arise. Exchang-
8,000 ing the locations for packaging and extrusion would create a better
b
flow of our main product. Also, as we improve our quality and re-
Optimal duce our rework inventory, we could capture some of the space now
P = $629,000
used for rework storage and processing and put it to productive use.
Our machine utilization of 63% is quite low. Most manufac-
c turers strive for at least an 85% machine utilization. If we could
27,750 X1 determine the cause(s) of this poor utilization, we might find a key
c. The optimal solution suggests making all MCA to a dramatic increase in capacity.
regular modems. Students should discuss the implications
of shipping no MCA intelligent modems. INTERNET CASE STUDY:
7-38. Minimize cost  12X1  9X2  11X3  4X4 Agri-Chem Corporation
subject to X1  X2  X3  X4  50 This case demonstrates an interesting use of linear programming
in a production setting.
X1  X2  X3  X4  7.5
Let X1  ammonia
X1  X2  X3  X4  22.5
X2  ammonium phosphate
X1  X2  X3  X4  15.0
X3  ammonium nitrate
Solution:
X4  urea
X1  7.5 pounds of C-30
X5  hydrofluoric acid
X2  15 pounds of C-92
X6  chlorine
X3  0 pounds of D-21
X7  caustic soda
X4  27.5 pounds of E-11
X8  vinyl chloride monomer
Cost  $3.35.
Objective function:
SOLUTION TO MEXICANA WIRE WORKS CASE Maximize Profit  80X1  120X2  140X3  140X4  90X5
 70X6  60X7  90X8
1. Maximize P  34 W75C  30 W33C  60 W5X  25 W7X
Subject to the following constraints:
subject to:
X1  1,200 X5  560
1 W75C  1,400
X2  540 X6  1,200
1 W33C  250
X3  490 X7  1,280
1 W5XC  1,510
X4  160 X8  840
1 W7XC  1,116
Current natural gas usage  85,680 cu. ft.  103/day
1 W75C  2 W33C  0 W5X  1 W7X  4,000
20 percent curtailment  68,554 cu. ft.  103/day
1 W75C  1 W33C  4 W5X  1 W7X  4,200
1 W75C  3 W33C  0 W5X  0 W7X  2,000
1 W75C  0 W33C  3 W5X  2 W7X  2,300
1 W75C  150
1 W7X  600
 CHAPTER 7 LINEAR PROGRAMMING MODELS: GRAPHICAL AND COMPUTER METHODS 97

Hence, the ninth constraint is: After 8 simplex iterations, optimal solution is reached. The
8X1  10X2  12X3  12X4  7X5  18X6  20X7  14X7 following is the production schedule:
 68,544 X1  1200 X5  560
The following is the production schedule (tons/day); X2  540 X6  720
X1  1,200 X5  560 X3  490 X7  0
X2  540 X6  1,200 X4  160 X8  840
X3  490 X7  425 Objective function value: $428,200
X4  160 X8  840 The caustic soda production is eliminated completely and the
chlorine production is reduced from 1,200 to 720 tons/day.
Objective function value  $487,300
Because of the natural gas curtailment, the caustic soda pro-
duction is reduced from 1280 tons/day to 425 tons/day.
For a 40 percent natural gas curtailment, the ninth constraint is:
8X1  10X2  12X3  12X4  7X5  18X6  20X7  14X8
 51,408