Mathematics for Marketing Jutta Lange, Lea Ventura

Linear Optimization

Solve the following exercise by
- Defining x, y and z
- Using the information given (the conditions) to create inequalities or equalities
- Writing down the equation of the function requested
- Solving the inequalities and equalities towards y (or x)
- Graphing the system of inequalities in a coordinate system
- Marking down/indicating the solution set (on your graph)
- Graphing the requested function in the coordinate system
- Answering the questions posed

Exercise 1

A wine dealer sets out to purchase red and white wine. He would like to buy at least 10
bottles of red wine and at least 25 bottles and at the most 55 bottles of white wine. He
would like to spend 400 at the most for his purchase. He has to pay 6 for a bottle of red
wine and 4 for a bottle of white wine. His profit will be 2 on selling a bottle of red wine
and 3 on selling a bottle of white wine.

How many bottles of red wine and how many bottles of white wine does he have to buy, in
order for his profit to be as high as possible? How much would his profit be in this case?

Use the following scale for your coordinate system: 1 cm 10 units


Exercise 2

A hotel is in the process of purchasing new curtains. It can choose from noniron polyester
curtains and cotton curtains that need ironing. Altogether the hotel needs to buy 120 pairs.
Out of these at least 20 pairs should be polyester and at least 30 pairs should be cotton. A
pair of polyester curtains costs 60 , whereas a pair of cotton curtains costs 20 . The total
purchasing costs should not exceed 4,000 . The yearly maintenance costs amount to 10
for a pair of polyester curtains and 20 for a pair of cotton curtains.

How many pairs of polyester curtains and how many pairs of cotton curtains should be
purchased, in order to keep the yearly maintenance costs to a minimum? How high will the
maintenance costs be in this case?

Use the following scale for your coordinate system: 1 cm 20 units
Mathematics for Marketing Jutta Lange, Lea Ventura
Answers

Exercise 1

We define the following variables:
x bottles of red wine
y bottles of white wine
z net profit (in ) -> to be maximized!

The conditions these variables have to fulfill are:
I. x 10 II. y 25 and y 55 III. 6x + 4y 400 so y - 1.5x + 100
The requested function is z = 2x + 3y (max.), which rearranged is y = -
3
2
x +
3
z

The corner points of the solution set are:
A ( 10 | 25 ), B ( 50 | 25 ), C ( 30 | 55 ) and D ( 10 | 55 )
Final answer: The wine dealer will maximize his profit, if he sells 30 bottles of red wine and
55 bottles of white wine. His profit will then amount to 225 .

Exercise 2
We define the following variables:
x pairs of polyester curtains
y pairs of cotton curtains
z total maintenance costs (in ) - > to be minimized!

The conditions these variables have to fulfill are:
I. x 20 II. y 30 III. 60x + 20y 4,000 so y - 3x + 200 and
IV. x + y = 120 so y = - x + 120
The equation for the requested function is z = 10x + 20y ( min. ) so y = -
2
1
x +
20
z

The corner points of the solution set are:
A ( 20/100 ), B ( 40/80 )

Final answer: The hotel can minimize its yearly total maintenance costs by purchasing 40
pairs of polyester curtains and 80 pairs of cotton curtains. His costs will then amount to
2,000 .