Chapter 9

Linear Programming Applications

Learning Objectives

1. Learn about applications of linear programming that have been encountered in practice.

2. Develop an appreciation for the diversity of problems that can be modeled as linear programs.

3. Obtain practice and experience in formulating realistic linear programming models.

4. Understand linear programming applications such as:

media selection production scheduling
portfolio selection work force assignments
financial mix strategy blending problems
data envelopment analysis revenue management

Note to Instructor

The application problems of Chapter 9 have been designed to give the student an understanding and 
appreciation of the broad range of problems that can be approached by linear programming.  While the 
problems are indicative of the many linear programming applications, they have been kept relatively small in 
order to ease the student's formulation and solution effort.  Each problem will give the student an opportunity
to practice formulating an approximate linear programming model.  However, the solution and the 
interpretation of the solution will require the use of a software package such as The Management Scientist, 
Microsoft Excel's Solver or LINDO.

9 ­ 1
Chapter 9

Solutions:

1. a. Let T = number of television spot advertisements
R = number of radio advertisements
N = number of newspaper advertisements

Max 100,000T + 18,000R + 40,000N

s.t.
  2,000T +    300R +    600N  18,200 Budget
         T  10 Max TV
        R  20 Max Radio
        N  10 Max News
   ­0.5T +    0.5R ­    0.5N  0 Max 50% Radio
     0.9T  ­    0.1R ­    0.1N  0 Min 10% TV

T,  R,  N,  0

Budget $
Solution: T = 4  $8,000
R = 14    4,200
N = 10      6,000
$18,200 Audience = 1,052,000.

This information can be obtained from The Management Scientist as follows.

OPTIMAL SOLUTION

Objective Function Value =       1052000.000 

      Variable             Value             Reduced Costs   
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­ 
          T                    4.000                  0.000 
          R                   14.000                  0.000 
          N                   10.000                  0.000 

     Constraint        Slack/Surplus           Dual Prices    
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­
          1                    0.000                 51.304 
          2                    6.000                  0.000 
          3                    6.000                  0.000 
          4                    0.000              11826.087 
          5                    0.000               5217.391 
          6                    1.200                  0.000 

9 ­ 2
 Linear Programming Applications

OBJECTIVE COEFFICIENT RANGES

   Variable       Lower Limit       Current Value     Upper Limit
 ­­­­­­­­­­­­   ­­­­­­­­­­­­­­­    ­­­­­­­­­­­­­­­  ­­­­­­­­­­­­­­­
       T             ­18000.000        100000.000        120000.000 
       R              15000.000         18000.000    No Upper Limit
       N              28173.913         40000.000    No Upper Limit

RIGHT HAND SIDE RANGES

  Constraint      Lower Limit       Current Value     Upper Limit
 ­­­­­­­­­­­­   ­­­­­­­­­­­­­­­    ­­­­­­­­­­­­­­­  ­­­­­­­­­­­­­­­
       1              14750.000         18200.000         31999.996 
       2                  4.000            10.000    No Upper Limit
       3                 14.000            20.000    No Upper Limit
       4                  0.000            10.000            12.339 
       5                 ­8.050             0.000             2.936 
       6         No Lower Limit             0.000             1.200 

b. The dual price for the budget constraint is 51.30.  Thus, a $100 increase in budget should provide an
increase in audience coverage of approximately 5,130.  The right­hand­side range for the budget 
constraint will show this interpretation is correct.

2. a. Let x1 = units of product 1 produced
x2 = units of product 2 produced

Max   30x1 +   15x2

s.t.
     x1 + 0.35x2  100 Dept. A
0.30x1 + 0.20x2  36 Dept. B
0.20x1 + 0.50x2  50 Dept. C

x1,  x2   0

Solution: x1 = 77.89, x2 = 63.16  Profit = 3284.21

b. The dual price for Dept. A is $15.79, for Dept. B it is $47.37, and for Dept. C it is $0.00.  Therefore 
we would attempt to schedule overtime in Departments A and B.  Assuming the current labor 
available is a sunk cost, we should be willing to pay up to $15.79 per hour in Department A and up 
to $47.37 in Department B.

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Chapter 9

c. Let xA = hours of overtime in Dept. A
xB = hours of overtime in Dept. B
xC = hours of overtime in Dept. C

Max   30x1 +   15x2 ­ 18xA ­ 22.5xB ­ 12xC

s.t.
      x1 + 0.35x2 ­    xA  100
0.30x1 + 0.20x2 ­      xB  36
0.20x1 + 0.50x2 ­    xC  50
   xA  10
     xB  6
   xC  8
x1, x2, xA, xB, xC  0
     x1 = 87.21
     x2 = 65.12
Profit = $3341.34
Overtime
Dept. A 10 hrs.
Dept. B 3.186 hrs
Dept. C 0 hours

Increase in Profit from overtime = $3341.34 ­ 3284.21 = $57.13

3. x1 = $ automobile loans
x2 = $ furniture loans
x3 = $ other secured loans
x4 = $ signature loans
x5 = $ "risk free" securities

Max 0.08x1 + 0.10x2 + 0.11x3 + 0.12x4 + 0.09x5

s.t.
     x5    600,000 [1]
     x4  0.10(x  + x  + x  + x )
1 2 3 4

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 Linear Programming Applications

or ­0.10x1 ­ 0.10x2 ­ 0.10x3 +   0.90x4   0 [2]

     x2 +      x3   x
1
or ­     x1 +      x2 +      x3   0 [3]
     x3 +      x4   x
5
or +      x3 +      x4 ­      x5   0 [4]
      x1 +      x2 +      x3 +      x4 +      x5 =  2,000,000 [5]

x1,  x2,  x3,  x4,  x5   0
Solution:
Automobile Loans (x1) = $630,000
Furniture Loans (x2) = $170,000
Other Secured Loans (x3) = $460,000
Signature Loans (x4) = $140,000
Risk Free Loans (x5) = $600,000

Annual Return $188,800  (9.44%)

4. a. x1 = pounds of bean 1
x2 = pounds of bean 2
x3 = pounds of bean 3

Max 0.50x1 + 0.70x2 + 0.45x3

s.t.

75x1  85x2  60 x3  75
 
x1  x 2  x3
or 10x2 ­ 15x3  0     Aroma
86 x1  88 x2  75x3  80
x1  x 2  x3
or    6x1 +    8x2 ­    5x3  0     Taste
     x1  500     Bean 1
       x2  600     Bean 2
     x3  400     Bean 3
     x1 +      x2 +      x3 = 1000     1000 pounds
x1,  x2,  x3   0

Optimal Solution: x1 = 500, x2 = 300, x3 = 200  Cost: $550

9 ­ 5
Chapter 9

b. Cost per pound = $550/1000 = $0.55

c. Surplus for aroma:   s1 = 0; thus aroma rating = 75
Surplus for taste:   s2 = 4400; thus taste rating = 80 + 4400/1000 lbs. = 84.4

d. Dual price = ­$0.60.  Extra coffee can be produced at a cost of $0.60 per pound. 

5. Let x1 = amount of ingredient A
x2 = amount of ingredient B
x3 = amount of ingredient C

Min 0.10x1 + 0.03x2 + 0.09x3

s.t.
    1x1 +     1x2 +     1x3  10 [1]
    1x1 +     1x2 +     1x3  15 [2]
    1x1      1x
2
or     1x1 ­     1x2    0 [3]
    1x3  1/2x
1
or ­1/2x1 +     1x3  0 [4]
x1,  x2,  x3   0

Solution: x1 = 4, x2 = 4, x3 = 2  Cost = $0.70 per gallon.  

6. Let x1 = units of product 1
x2 = units of product 2
b1 = labor­hours Dept. A 
b2 = labor­hours Dept. B

Max 25x1 + 20x2 + 0b1 + 0b2

s.t.
 6x1 +  8x2 ­ 1b1 = 0
12x1 + 10x2 ­ 1b2 = 0
1b1 + 1b2  900

x1, x2, b1, b2  0

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 Linear Programming Applications

Solution: x1 = 50, x2 = 0, b1 = 300, b2 = 600   Profit: $1,250 

7. a. Let F =  total funds required to meet the six years of payments
G1 =  units of government security 1
G2 =  units of government security 2
Si =  investment in savings at the beginning of year i

Note:  All decision variables are expressed in thousands of dollars

MIN F
     S.T.

        1)  F ­ 1.055G1 ­ 1.000G2 ­ S1 = 190
        2)  .0675G1 + .05125G2 +1.04S1 ­ S2 = 215
        3)  .0675G1 + .05125G2 + 1.04S2 ­ S3 = 240
        4)  1.0675G1 + .05125G2 + 1.04S3 ­ S4 = 285
        5)  1.05125G2 + 1.04S4 ­ S5 = 315
        6)  1.04S5 ­ S6 = 460

OPTIMAL SOLUTION

Objective Function Value =        1484.96655 

      Variable             Value             Reduced Costs   
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­ 
          F               1484.96655                0.00000 
         G1                232.39356                0.00000 
         G2                720.38782                0.00000 
         S1                329.40353                0.00000 
         S2                180.18611                0.00000 
         S3                  0.00000                0.02077 
         S4                  0.00000                0.01942 
         S5                442.30769                0.00000 
         S6                  0.00000                0.78551 

     Constraint        Slack/Surplus           Dual Prices    
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­
          1                  0.00000               ­1.00000 
          2                  0.00000               ­0.96154 
          3                  0.00000               ­0.92456 
          4                  0.00000               ­0.86903 
          5                  0.00000               ­0.81693 
          6                  0.00000               ­0.78551 

The current investment required is $1,484,967.  This calls for investing $232,394 in government 
security 1 and $720,388 in government security 2.  The amounts, placed in savings are $329,404, 
$180,186 and $442,308 for years 1,2 and 5 respectively.  No funds are placed in savings for years 3,
4 and 6.

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Chapter 9

b. The dual price for constraint 6 indicates that each $1 reduction in the payment required at the 
beginning of year 6 will reduce the amount of money Hoxworth must pay the trustee by $0.78551.  
The lower limit on the right­hand­side range is zero so a $60,000 reduction in the payment at the 
beginning of year 6 will save Hoxworth $60,000 (0.78551)  =  $47,131.

c. The dual price for constraint 1 shows that every dollar of reduction in the initial payment is worth 
$1.00 to Hoxworth.  So Hoxworth should be willing to pay anything less than $40,000.

d. To reformulate this problem, one additional variable needs to be added, the right­hand sides for the 
original constraints need to be shifted ahead by one, and the right­hand side of the first constraint 
needs to be set equal to zero.  The value of the optimal solution with this formulation is $1,417,739.
Hoxworth will save $67,228 by having the payments moved to the end of each year.

The revised formulation is shown below:

     MIN F

     S.T.

        1)  F ­ 1.055G1 ­ 1.000G2 ­ S1 = 0
        2)  .0675G1 + .05125G2 + 1.04S1 ­ S2 = 190
        3)  .0675G1 + .05125G2 + 1.04S2 ­ S3 = 215
        4)  1.0675G1 + .05125G2 + 1.04S3 ­ S4 = 240
        5)  1.05125G2 +1.04S4 ­ S5 = 285
        6)  1.04S5 ­ S6 = 315
        7)  1.04S6 ­ S7 = 460

8. Let x1 = the number of officers scheduled to begin at 8:00 a.m.
x2 = the number of officers scheduled to begin at noon
x3 = the number of officers scheduled to begin at 4:00 p.m.
x4 = the number of officers scheduled to begin at 8:00 p.m.
x5 = the number of officers scheduled to begin at midnight
x6 = the number of officers scheduled to begin at 4:00 a.m.

The objective function to minimize the number of officers required is as follows:

Min x1 + x2 + x3 + x4 + x5 + x6
The constraints require the total number of officers of duty each of the six four­hour periods to be at
least equal to the minimum officer requirements.  The constraints for the six four­hour periods are 
as follows:

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 Linear Programming Applications

Time of Day
8:00 a.m. ­ noon x1 + x6   5
noon to 4:00 p.m. x1 + x2   6
4:00 p.m. ­ 8:00 p.m. x2 + x3  10
8:00 p.m. ­ midnight x3 + x4   7
midnight ­ 4:00 a.m. x4 + x5   4
4:00 a.m. ­ 8:00 a.m. x5 + x6   6
x1,  x2,  x3,  x4,  x5,  x6   0

Schedule 19 officers as follows:

x1 = 3 begin at 8:00 a.m.
x2 = 3 begin at noon
x3 = 7 begin at 4:00 p.m.
x4 = 0 begin at 8:00 p.m.
x5 = 4 begin at midnight
x6 = 2 begin at 4:00 a.m.

9. a. Let each decision variable, A, P, M, H and G, represent the fraction or proportion of the total 
investment placed in each investment alternative.

Max .073A + .103P + .064M + .075H + .045G

s.t.
A + P + M + H + G = 1
.5A + .5P ­ .5M ­ .5H  0
­.5A ­ .5P + .5M + .5H  0
­ .25M ­ .25H + G  0
­.6A + .4P  0
A, P, M, H, G  0

Solution: Objective function  =  0.079 with

Atlantic Oil =  0.178
Pacific Oil =  0.267
Midwest Oil =  0.000
Huber Steel =  0.444
Government Bonds =  0.111

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Chapter 9

b. For a total investment of $100,000, we show

Atlantic Oil =  $17,800
Pacific Oil =    26,700
Midwest Oil =      0.000
Huber Steel =    44,400
Government Bonds =    11,100
Total    $100,000

c. Total earnings  =  $100,000 (.079)  =  $7,900

d. Marginal rate of return is .079

10. a. Let S = the proportion of funds invested in stocks

B = the proportion of funds invested in bonds
M = the proportion of funds invested in mutual funds
C = the proportion of funds invested in cash

The linear program and optimal solution obtained using The Management Scientist is as follows:

MAX 0.1S+0.03B+0.04M+0.01C

S.T.

1) 1S+1B+1M+1C=1
2) 0.8S+0.2B+0.3M<0.4
3) 1S<0.75
4) -1B+1M>0
5) 1C>0.1
6) 1C<0.3

OPTIMAL SOLUTION

Objective Function Value = 0.054

Variable Value Reduced Costs

-------------- --------------- ------------------
S 0.409 0.000
B 0.145 0.000
M 0.145 0.000
C 0.300 0.000

Constraint Slack/Surplus Dual Prices

-------------- --------------- ------------------
1 0.000 0.005
2 0.000 0.118
3 0.341 0.000
4 0.000 -0.001
5 0.200 0.000
6 0.000 0.005

OBJECTIVE COEFFICIENT RANGES

9 ­ 10
 Linear Programming Applications

Variable Lower Limit Current Value Upper Limit

------------ --------------- --------------- ---------------
S 0.090 0.100 No Upper Limit
B 0.028 0.030 0.036
M No Lower Limit 0.040 0.042
C 0.005 0.010 No Upper Limit

RIGHT HAND SIDE RANGES

Constraint Lower Limit Current Value Upper Limit

------------ --------------- --------------- ---------------
1 0.800 1.000 1.900
2 0.175 0.400 0.560
3 0.409 0.750 No Upper Limit
4 -0.267 0.000 0.320
5 No Lower Limit 0.100 0.300
6 0.100 0.300 0.500

The optimal allocation among the four investment alternatives is

Stocks 40.9%
Bonds 14.5%
Mutual Funds 14.5%
Cash 30.0%

The annual return associated with the optimal portfolio is 5.4%

The total risk = 0.409(0.8) + 0.145(0.2) + 0.145(0.3) + 0.300(0.0) = 0.4

b. Changing the right-hand-side value for constraint 2 to 0.18 and resolving using The Management
Scientist we obtain the following optimal solution:

Stocks 0.0%
Bonds 36.0%
Mutual Funds 36.0%
Cash 28.0%

The annual return associated with the optimal portfolio is 2.52%

The total risk = 0.0(0.8) + 0.36(0.2) + 0.36(0.3) + 0.28(0.0) = 0.18

c. Changing the right-hand-side value for constraint 2 to 0.7 and resolving using The Management
Scientist we obtain the following optimal solution:

The optimal allocation among the four investment alternatives is

Stocks 75.0%
Bonds 0.0%
Mutual Funds 15.0%
Cash 10.0%

The annual return associated with the optimal portfolio is 8.2%

The total risk = 0.75(0.8) + 0.0(0.2) + 0.15(0.3) + 0.10(0.0) = 0.65

d. Note that a maximum risk of 0.7 was specified for this aggressive investor, but that the risk index
for the portfolio is only 0.65. Thus, this investor is willing to take more risk than the solution

9 ­ 11
Chapter 9

shown above provides. There are only two ways the investor can become even more aggressive:
increase the proportion invested in stocks to more than 75% or reduce the cash requirement of at
least 10% so that additional cash could be put into stocks. For the data given here, the investor
should ask the investment advisor to relax either or both of these constraints.

e. Defining the decision variables as proportions means the investment advisor can use the linear
programming model for any investor, regardless of the amount of the investment. All the investor
advisor needs to do is to establish the maximum total risk for the investor and resolve the problem
using the new value for maximum total risk.

11. Let xij = units of component i purchased from supplier j

Min   12x11 + 13x1 + 14x13 + 10x21 +  11x22 + 10x23

2
s.t.
     x11 +     x1 +   x13 = 1000

2
     x21 +      x22 +    x23  = 800
     x11 +      x21  600
    x1 +      x22  1000

2
  x13 +   x23  800

x11,  x12,  x13,  x21,  x22,  x23   0

Solution:
Supplier
1 2 3

Component 1 600 400 0

Component 2 0 0 800
Purchase Cost = $20,400

12. Let Bi = pounds of shrimp bought in week i, i = 1,2,3,4

Si = pounds of shrimp sold in week i, i = 1,2,3,4
Ii = pounds of shrimp held in storage (inventory) in week i

Total purchase cost = 6.00B1 + 6.20B2 + 6.65B3 + 5.55B4 
Total sales revenue = 6.00S1 + 6.20S2 + 6.65S3 + 5.55S4
Total storage cost = 0.15I1 + 0.15I2 + 0.15I3 + 0.15I4

Total profit contribution = (total sales revenue) ­ (total purchase cost) ­ (total storage cost)

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Objective: maximize total profit contribution subject to balance equations for each week, storage 
capacity for each week, and ending inventory requirement for week 4.

Max 6.00S1 + 6.20S2 + 6.65S3 + 5.55S4 ­ 6.00B1 ­ 6.20B2 ­ 6.65B3 ­ 5.55B4 ­ 0.15I1 ­ 0.15I2 ­ 0.15I3
­ 0.15I4
s.t.
20,000 + B1 ­ S1 = I1 Balance eq. ­ week 1
I1 + B2 ­ S2 = I2 Balance eq. ­ week 2
I2 + B3 ­ S3 = I3 Balance eq. ­ week 3
I3 + B4 ­ S4 = I4 Balance eq. ­ week 4
I1  100,000 Storage cap. ­ week 1
I2  100,000 Storage cap. ­ week 2
I3  100,000 Storage cap. ­ week 3
I4  100,000 Storage cap. ­ week 4
I4  25,000 Req'd inv. ­ week 4
 all variables 0

Note that the first four constraints can be written as follows:

I1 ­ B1 + S1 = 20,000
I1 ­ I2 + B2 ­ S2 = 0
I2 ­ I3 + B3 ­ S3 = 0
I3 ­ I4 + B4 ­ S4 = 0

The optimal solution obtained using The Management Scientist follows:

Week (i) Bi Si Ii
1 80,000 0 100,000
2 0 0 100,000
3 0 100,000 0
4 25,000 0 25,000

Total profit contribution = $12,500

Note however, ASC started week 1 with 20,000 pounds of shrimp and ended week 4 with 25,000 
pounds of shrimp. During the 4­week period, ASC has taken profits to reinvest and build inventory 
by 5000 pounds in anticipation of future higher prices. The amount of profit reinvested in inventory 
is ($5.55 + $0.15)(5000) = $28,500. Thus, total profit for the 4­week period including reinvested 
profit is $12,500 + $28,500 = $41,000.

13. Let BR = pounds of Brazilian beans purchased to produce Regular

BD = pounds of Brazilian beans purchased to produce DeCaf
CR = pounds of Colombian beans purchased to produce Regular
CD = pounds of Colombian beans purchased to produce DeCaf

Type of Bean Cost per pound ($)

9 ­ 13
Chapter 9

Brazilian 1.10(0.47) = 0.517
Colombian 1.10(0.62) = 0.682

Total revenue = 3.60(BR + CR) + 4.40(BD + CD)

Total cost of beans = 0.517(BR + BD) + 0.682(CR + CD)

Total production cost = 0.80(BR + CR) + 1.05(BD + CD)

Total packaging cost = 0.25(BR + CR) + 0.25(BD + CD)

Total contribution to profit = (total revenue) ­ (total cost of beans) ­ (total production cost)

 Total contribution to profit = 2.033BR + 2.583BD + 1.868CR + 2.418CD

Regular % constraint

BR = 0.75(BR + CR)
0.25BR ­ 0.75CR = 0

DeCaf % constraint

BD = 0.40(BD + CD)
0.60BD ­ 0.40CD = 0

Pounds of Regular: BR + CR = 1000

Pounds of DeCaf: BD + CD = 500

The complete linear program is

Max 2.033BR + 2.583BD + 1.868CR + 2.418CD

s.t.
0.25BR ­ 0.75CR = 0
0.60BD ­ 0.40CD = 0
BR + CR = 1000
BD + CD = 500
  BR, BD, CR, CD  0

Using The Management Scientist, the optimal solution is BR = 750, BD = 200, CR = 250, and       
CD = 300.

The value of the optimal solution is $3233.75

14. a. Let xi = number of Classic 2l boats produced in Quarter i; i = 1,2,3,4

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 Linear Programming Applications

si = ending inventory of Classic 2l boats in Quarter i; i = 1,2,3,4

Min 10,000x1 + 11,000x2 + 12,100x3 + 13,310x4 + 250s1 + 250s2 + 300s3 + 300s4
s.t.
x1 ­ s1 = 1900 Quarter 1 demand
s1 + x2 ­ s2 = 4000 Quarter 2 demand
s2 + x3 ­ s3 = 3000 Quarter 3 demand
s3 + x4 ­ s4 = 1500 Quarter 4 demand
s4  500 Ending Inventory
x1  4000 Quarter 1 capacity
x2  3000 Quarter 2 capacity
x3  2000 Quarter 3 capacity
x4  4000 Quarter 4 capacity
b.
Quarter Production Ending Inventory Cost
1 4000 2100       40,525,000
2 3000 1100     33,275,000
3 2000  100     24,230,000
4 1900  500       25,439,000
$123,469,000

c. The dual prices tell us how much it would cost if demand were to increase by one additional unit.  
For example, in Quarter 2 the dual price is ­12,760; thus, demand for one more boat in Quarter 2 
will increase costs by $12,760.

d. The dual price of 0 for Quarter 4 tells us we have excess capacity in Quarter 4.  The positive dual 
prices in Quarters 1­3 tell us how much increasing the production capacity will improve the 
objective function.  For example, the dual price of $2510 for Quarter 1 tells us that if capacity is 
increased by 1 unit for this quarter, costs will go down $2510.
15. Let x11 = gallons of crude 1 used to produce regular
x12 = gallons of crude 1 used to produce high­octane
x21 = gallons of crude 2 used to produce regular
x22 = gallons of crude 2 used to produce high­octane

Min 0.10x11 + 0.10x12 + 0.15x21 + 0.15x22
s.t.

Each gallon of regular must have at least 40% A.

         x11 + x21 = amount of regular produced 

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Chapter 9

   0.4(x11 + x21) = amount of A required for regular
0.2x11 + 0.50x21 = amount of A in (x11 + x21) gallons of regular gas 

 0.2x11 + 0.50x21  0.4x11 + 0.40x21  [1]
 ­0.2x11 + 0.10x21  0  

Each gallon of high octane can have at most 50% B.

           x12 + x22 = amount high­octane
     0.5(x12 + x22) = amount of B required for high octane
0.60x12 + 0.30x22 = amount of B in (x12 + x22) gallons of high octane. 

 0.60x12 + 0.30x22  0.5x12 + 0.5x22

   0.1x12 ­   0.2x22  0 [2]
   x11 + x21  800,000 [3]
   x12 + x22  500,000 [4]
                x11,  x12,  x21,  x22  0

Optimal Solution: x11 = 266,667, x12 = 333,333, x21 = 533,333, x22 = 166,667
Cost = $165,000

16. Let xi = number of 10­inch rolls of paper processed by cutting alternative i;  i = 1,2...,7

Min  x1 +  x2 +  x3 +  x4 +  x5 +  x6 +  x7

s.t.
6x1 + 2x3 +  x5 +  x6 + 4x7  1000 1 1/2" production
4x2 +  x4 + 3x5 + 2x6  2000 2 1/2" production
2x3 + 2x4 +  x6 +  x7  4000 3 1/2" production

x1,  x2,  x3,  x4,  x5,  x6,  x7   0

x1 = 0
x2 =  125
x3 =  500 2125 Rolls

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x4 = 1500
x5 = 0 Production:
x6 = 0 1 1/2"  1000
x7 = 0  2 1/2"  2000
3 1/2"  4000

Waste: Cut alternative #4 (1/2" per roll)
 750 inches.

b. Only the objective function needs to be changed.  An objective function minimizing waste 
production and the new optimal solution are given.

Min  x1 + 0x2 + 0x3 + 0.5x4 + x5 + 0x6 + 0.5x7
x1 = 0
x2 = 500
x3 = 2000 2500 Rolls
x4 = 0
x5 = 0 Production:
x6 = 0 1 1/2"  4000
x7 = 0 2 2/1"  2000
3 1/2"  4000

Waste is 0; however, we have over­produced the 1 1/2" size by 3000 units.  Perhaps these can be 
inventoried for future use.

c. Minimizing waste may cause you to over­produce.  In this case, we used 375 more rolls to generate 
a 3000 surplus of the 1 1/2" product.  Alternative b might be preferred on the basis that the 3000 
surplus could be held in inventory for later demand.  However, in some trim problems, excess 
production cannot be used and must be scrapped.  If this were the case, the 3000 unit 1 1/2" size 
would result in 4500 inches of waste, and thus alternative a would be the preferred solution.  

17. a. Let FM =  number of frames manufactured

FP =  number of frames purchased
SM =  number of supports manufactured
SP =  number of supports purchased
TM =  number of straps manufactured
TP =  number of straps purchased

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Chapter 9

Min 38FM + 51FP + 11.5SM + 15SP + 6.5TM + 7.5TP

s.t.
3.5FM + 1.3SM + 0.8TM  21,000
2.2FM + 1.7SM  25,200
3.1FM + 2.6SM + 1.7TM  40,800
FM + FP  5,000
SM + SP  10,000
TM + TP  5,000
FM, FP, SM, SP, TM, TP    0.

Solution:
Manufacture Purchase
Frames 5000 0
Supports 2692 7308
Straps 0 5000

b. Total Cost  =  $368,076.91

c. Subtract values of slack variables from minutes available to determine minutes used.  Divide by 60 
to determine hours of production time used.

   Constraint
1 Cutting: Slack  =  0   350 hours used
2 Milling: (25200 ­ 9623) / 60  =  259.62 hours
3 Shaping: (40800 ­ 18300) / 60  =  375 hours

d. Nothing, there are already more hours available than are being used.

e. Yes.  The current purchase price is $51.00 and the reduced cost of 3.577 indicates that for a 
purchase price below $47.423 the solution may improve.  Resolving with the coefficient of FP  =  
45 shows that 2714 frames should be purchased.

The optimal solution is as follows:

OPTIMAL SOLUTION

Objective Function Value =        361500.000 

      Variable             Value             Reduced Costs   
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­ 

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         FM               2285.714                  0.000 
         FP               2714.286                  0.000 
         SM              10000.000                  0.000 
         SP                  0.000                  0.900 
         TM                  0.000                  0.600
         TP               5000.000                  0.000 

     Constraint        Slack/Surplus           Dual Prices    
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­
          1                   0.000                  2.000 
          2                3171.429                  0.000 
          3                7714.286                  0.000 
          4                   0.000                ­45.000 
          5                   0.000                ­14.100 
          6                   0.000                 ­7.500 

18. a. Let x1 = number of Super Tankers purchased

x2 = number of Regular Line Tankers purchased
x3 = number of Econo­Tankers purchased

Min      550x1 +      425x2 +      350x3

s.t.
    6700x1 +    55000x2 +     4600x3  600,000 Budget
15(5000)x1 + 20(2500)x2 + 25(1000)x3  550,000
or
   75000x1 +    50000x2 +    25000x3  550,000 Meet Demand
          x1  +           x2 + x3             15     Max. Total Vehicles
x3              3     Min. Econo­Tankers

x1  1/2(x1 + x2 + x3)
or
1/2x1 ­ 1/2x2 ­ 1/2x3  0    No more than 50% Super Tankers 
x1,  x2,  x3   0

Solution: 5 Super Tankers, 2 Regular Tankers, 3 Econo­Tankers
Total Cost: $583,000
Monthly Operating Cost: $4,650

b. The last two constraints in the formulation above must be deleted and the problem resolved.

9 ­ 19
Chapter 9

The optimal solution calls for 7 1/3 Super Tankers at an annual operating cost of $4033.  However, 
since a partial Super Tanker can't be purchased we must round up to find a feasible solution of 8 
Super Tankers with a monthly operating cost of $4,400.

Actually this is an integer programming problem, since partial tankers can't be purchased.  We were
fortunate in part (a) that the optimal solution turned out integer.

The true optimal integer solution to part (b) is x1 = 6 and x2 = 2 with a monthly operating cost of 
$4150.  This is 6 Super Tankers and 2 Regular Line Tankers.

19. a. Let x11 = amount of men's model in month 1

   x21 = amount of women's model in month 1
   x12 = amount of men's model in month 2
   x22 = amount of women's model in month 2
s11 = inventory of men's model at end of month 1
s21 = inventory of women's model at end of month 1
s12 = inventory of men's model at end of month 2
s22 = inventory of women's model at end of month 

The model formulation for part (a) is given.

Min   120x11 + 90x21 + 120x12 + 90x22 + 2.4s11 + 1.8s21 + 2.4s12 + 1.8s22
s.t.
20 + x11 ­ s11 = 150
or
        x11 ­ s11 = 130 Satisfy Demand [1]

30 + x21 ­ s21 = 125
or
   x21 ­ s21 = 95 Satisfy Demand [2]

s11 + x12 ­ s12 = 200 Satisfy Demand [3]

s21 + x22 ­ s22 = 150 Satisfy Demand [4]
          s12  25 Ending Inventory [5]

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 Linear Programming Applications

          s22  25 Ending Inventory [6]   

Labor Hours: Men’s  =  2.0 + 1.5  =  3.5
Women’s  =  1.6 + 1.0  =  2.6

3.5 x11 + 2.6 x21    900 Labor Smoothing for [7]

3.5 x11 + 2.6 x21    1100 Month 1 [8]

3.5 x11 + 2.6 x21 ­ 3.5 x12 ­ 2.6 x22    100 Labor Smoothing for [9]

­3.5 x11 ­ 2.6 x21 + 3.5 x12 + 2.6 x22    100 Month 2 [10]

x11,  x12,  x21,  x22,  s11,  s12,  s21, s22    0

The optimal solution is to produce 193 of the men's model in month 1, 162 of the men's model in 
month 2, 95 units of the women's model in month 1, and 175 of the women's model in month 2. 
Total Cost = $67,156

Inventory Schedule

Month 1 63 Men's    0 Women's

Month 2 25 Men's 25 Women's

Labor Levels

Previous month 1000.00 hours
Month 1  922.25 hours
Month 2 1022.25 hours

b. To accommodate this new policy the right­hand sides of constraints [7] to [10] must be changed to 
950, 1050, 50, and 50 respectively.  The revised optimal solution is given.

x11 = 201
x21 =  95
x12 = 154
x22 = 175 Total Cost = $67,175

We produce more men's models in the first month and carry a larger men's model inventory;  the 
added cost however is only $19.  This seems to be a small expense to have less drastic labor force 
fluctuations.  The new labor levels are 1000, 950, and 994.5 hours each month.  Since the added 
cost is only $19, management might want to experiment with the labor force smoothing restrictions 

9 ­ 21
Chapter 9

to enforce even less fluctuations.  You may want to experiment yourself to see what happens.

20. Let xm = number of units produced in month m

Im = increase in the total production level in month m
Dm = decrease in the total production level in month m
sm = inventory level at the end of month m
where
m = 1 refers to March
m = 2 refers to April
m = 3 refers to May

Min 1.25 I1 + 1.25 I2 + 1.25 I3 + 1.00 D1 + 1.00 D2 + 1.00 D3 
s.t.

Change in production level in March

x1 ­ 10,000  =  I1 ­ D1
or
x1 ­ I1 + D1  =  10,000

Change in production level in April

x2 ­ x1  =  I2 ­ D2
or
x2 ­ x1 ­ I2 + D2  =  0

Change in production level in May

x3 ­ x2  =  I3 ­ D3
or
x3 ­ x2 ­ I3 + D3  =  0

Demand in March

2500 + x1 ­ s1  =  12,000
or
x1 ­ s1  =  9,500

Demand in April

s1 + x2 ­ s2  =  8,000

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 Linear Programming Applications

Demand in May

s2 + x3  =  15,000

Inventory capacity in March

s1    3,000

Inventory capacity in April

s2    3,000

Optimal Solution:

Total cost of monthly production increases and decreases  =  $2,500

x1  =  10,250 I1  =  250 D1  =  0

x2  =  10,250 I2  =  0 D2  =  0
x3  =  12,000 I3  =  1750 D3  =  0
s1  =  750
s2  =  3000

21. Decision variables : Regular

Model Month 1 Month 2

Bookshelf B1R B2R
Floor F1R F2R

Decision variables : Overtime

Model Month 1 Month 2

Bookshelf B1O B2O
Floor F1O F2O
Labor costs per unit

Model Regular Overtime

Bookshelf .7 (22) = 15.40 .7 (33) = 23.10
Floor 1 (22) = 22 1 (33) = 33

IB  =  Month 1 ending inventory for bookshelf units
IF  =  Month 1 ending inventory for floor model

9 ­ 23
Chapter 9

Objective function

Min 15.40 B1R + 15.40 B2R + 22 F1R + 22 F2R
        + 23.10 B1O + 23.10 B2O + 33 F1O + 33 F2O
        + 10 B1R + 10 B2R + 12 F1R + 12 F2R
        + 10 B1O + 10 B2O + 12 F1O + 12 F2O
        + 5 IB + 5 IF

or

Min 25.40 B1R + 25.40 B2R + 34 F1R + 34 F2R
        + 33.10 B1O + 33.10 B2O + 45 F1O + 45 F2O
        + 5 IB + 5 IF
s.t.
.7 B1R + 1 F1R      2400 Regular time: month 1
.7 B2R + 1 F2R      2400 Regular time: month 2
.7B1O +  1 F1O      1000 Overtime: month 1
.7B2O +  1 F2O      1000 Overtime: month 2
B1R + B1O ­ IB   =   2100 Bookshelf: month 1
IB + B2R + B2O  =   1200 Bookshelf: month 2
F1R + F1O ­ IF   =   1500 Floor: month 1
IF + F2R + F2O  =   2600 Floor: month 2

OPTIMAL SOLUTION

Objective Function Value =      241130.000

      Variable             Value             Reduced Costs   
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­ 
        B1R                  2100.000                   0.000
        B2R                  1200.000                   0.000
        F1R                   930.000                   0.000
        F2R                  1560.000                   0.000
        B1O                     0.000                   0.000
        B2O                     0.000                   0.000
        F1O                   610.000                   0.000
        F2O                  1000.000                   0.000
         IB                     0.000                   1.500
         IF                    40.000                   0.000

     Constraint        Slack/Surplus           Dual Prices    
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­
         1                      0.000                  11.000
         2                      0.000                  16.000
         3                    390.000                   0.000
         4                      0.000                   5.000
         5                      0.000                 ­33.100
         6                      0.000                 ­36.600
         7                      0.000                 ­45.000

9 ­ 24
 Linear Programming Applications

         8                      0.000                 ­50.000
OBJECTIVE COEFFICIENT RANGES

   Variable       Lower Limit       Current Value     Upper Limit
 ­­­­­­­­­­­­   ­­­­­­­­­­­­­­­    ­­­­­­­­­­­­­­­  ­­­­­­­­­­­­­­­
     B1R                23.900             25.400           25.400
     B2R        No Lower Limit             25.400           25.400
     F1R                34.000             34.000           36.143
     F2R                34.000             34.000           50.000
     B1O                33.100             33.100   No Upper Limit
     B2O                33.100             33.100   No Upper Limit
     F1O                40.000             45.000           45.000
     F2O        No Lower Limit             45.000           45.000
      IB                 3.500              5.000   No Upper Limit
      IF                 0.000              5.000            7.143

RIGHT HAND SIDE RANGES

  Constraint      Lower Limit       Current Value     Upper Limit
 ­­­­­­­­­­­­   ­­­­­­­­­­­­­­­    ­­­­­­­­­­­­­­­  ­­­­­­­­­­­­­­­
       1               2010.000           2400.000         3010.000
       2               2010.000           2400.000         2440.000
       3                610.000           1000.000   No Upper Limit
       4                610.000           1000.000         1040.000
       5               1228.571           2100.000         2657.143
       6               1142.857           1200.000         1757.143
       7                890.000           1500.000         1890.000
       8               2560.000           2600.000         2990.000

22. Let SM1 = No. of small on machine M1

SM2 = No. of small on machine M2
SM3 = No. of small on machine M3
LM1 = No. of large on machine M1
LM2 = No. of large on machine M2
LM3 = No. of large on machine M3
MM2 = No. of meal on machine M2
MM3 = No. of meal on machine M3

Output from The Management Scientist showing the formulation and solution follows.  Note that 
constraints 1­3 guarantee that next week's schedule will be met and constraints 4­6 enforce machine
capacities.

LINEAR PROGRAMMING PROBLEM

MIN 20SM1+24SM2+32SM3+15LM1+28LM2+35LM3+18MM2+36MM3

S.T.

1) 1SM1+1SM2+1SM3>80000
2) +1LM1+1LM2+1LM3>80000
3) +1MM2+1MM3>65000
4) 0.03333SM1+0.04LM1<2100

9 ­ 25
Chapter 9

5) +0.02222SM2+0.025LM2+0.03333MM2<2100
6) +0.01667SM3+0.01923LM3+0.02273MM3<2400

OPTIMAL SOLUTION

Objective Function Value = 5515886.58866

Variable Value Reduced Costs

-------------- --------------- ------------------
SM1 0.00000 4.66500
SM2 0.00000 4.00000
SM3 80000.00000 0.00000
LM1 52500.00000 0.00000
LM2 0.00000 6.50135
LM3 27500.00000 0.00000
MM2 63006.30063 0.00000
MM3 1993.69937 0.00000

Constraint Slack/Surplus Dual Prices

-------------- --------------- ------------------
1 0.00000 -32.00000
2 0.00000 -35.00000
3 0.00000 -36.00000
4 0.00000 500.00000
5 0.00000 540.05401
6 492.25821 0.00000

OBJECTIVE COEFFICIENT RANGES

Variable Lower Limit Current Value Upper Limit

------------ --------------- --------------- ---------------
SM1 15.33500 20.00000 No Upper Limit
SM2 20.00000 24.00000 No Upper Limit
SM3 0.00000 32.00000 36.00000
LM1 No Lower Limit 15.00000 20.59856
LM2 21.49865 28.00000 No Upper Limit
LM3 29.40144 35.00000 41.50135
MM2 No Lower Limit 18.00000 24.00000
MM3 30.00000 36.00000 No Upper Limit

RIGHT HAND SIDE RANGES

Constraint Lower Limit Current Value Upper Limit

------------ --------------- --------------- ---------------
1 0.00000 80000.00000 109529.58688
2 52500.00000 80000.00000 105598.45103
3 63006.30063 65000.00000 86656.76257
4 1076.06196 2100.00000 3200.00000
5 1378.18010 2100.00000 2166.45000
6 1907.74179 2400.00000 No Upper Limit

Note that 5,515,887 square inches of waste are generated.  Machine 3 has 492 minutes of idle 
capacity.

9 ­ 26
 Linear Programming Applications

23. Let F = number of windows manufactured in February

M = number of windows manufactured in March
A = number of windows manufactured in April
Im = increase in production level necessary during month m
Dm = decrease in production level necessary during month m
sm = ending inventory in month m

Min 1I1 + 1I2 + 1I3 + 0.65D1 + 0.65D2 + 0.65D3 

s.t.
9000 + F ­ s1 = 15,000 February Demand
or

(1) F1 ­ s1 = 6000

(2) s1 + M ­ s2 = 16,500 March Demand

(3) s2 + A ­ s3 = 20,000 April Demand

F ­ 15,000 = I1 ­ D1 Change in February Production
or

(4) F ­ I1 + D1 = 15,000

M ­ F = I2 ­ D2 Change in March Production
or

(5) M ­ F ­ I2 + D2 = 0

A ­ M = I3 ­ D3 Change in April Production
or

(6) A ­ M ­ I3 + D3 = 0

(7) F  14,000 February Production Capacity

(8) M  14,000 March Production Capacity

(9) A  18,000 April Production Capacity

(10) s1   6,000 February Storage Capacity

(11) s2   6,000 March Storage Capacity

(12)  s3   6,000 April Storage Capacity

9 ­ 27
Chapter 9

Optimal Solution: Cost = $6,450

February March April

Production Level 12,000 14,000 16,500
Increase in Production 0 2,000 2,500
Decrease in Production 3,000 0 0
Ending Inventory 6,000 3,500 0

24. Let x1 = proportion of investment A undertaken

x2 = proportion of investment B undertaken
s1 = funds placed in savings for period 1
s2 = funds placed in savings for period 2
s3 = funds placed in savings for period 3
s4 = funds placed in savings for period 4
L1 = funds received from loan in period 1
L2 = funds received from loan in period 2
L3 = funds received from loan in period 3
L4 = funds received from loan in period 4

Objective Function:

In order to maximize the cash value at the end of the four periods, we must consider the value of 
investment A, the value of investment B, savings income from period 4, and loan expenses for
period 4.

Max 3200x1 + 2500x2 + 1.1s4 ­ 1.18L4

Constraints require the use of funds to equal the source of funds for each period.

Period 1:
1000x1 + 800x2 + s1 = 1500 + L1 
or
1000x1 + 800x2 + s1 ­ L1 = 1500

Period 2:

9 ­ 28
 Linear Programming Applications

800x1 + 500x2 + s2 + 1.18L1 = 400 + 1.1s1 + L2
or
800x1 + 500x2 ­ 1.1s1 + s2 + 1.18L1 ­ L2 = 400

Period 3
200x1 + 300x2 + s3 + 1.18L2 = 500 + 1.1s2 + L3
or
200x1 + 300x2 ­ 1.1s2 + s3 + 1.18L2 ­ L3 = 500
Period 4
s4 + 1.18L3 = 100 + 200x1 + 300x2 + 1.1s3 + L4
or
­200x1 ­ 300x2 ­ 1.1s3 + s4 + 1.18L3 ­ L4 = 100

Limits on Loan Funds Available

L1  200
L2  200
L3  200
L4  200

Proportion of Investment Undertaken

x1  1
x2  1

Optimal Solution:  $4340.40

Investment A x1 = 0.458  or  45.8%

Investment B x2 = 1.0  or 100.0%

Savings/Loan Schedule:

Period 1 Period 2 Period 3 Period 4

Savings 242.11 — — 341.04

Loan — 200.00 127.58 —

25. Let x1 = number of part­time employees beginning at 11:00 a.m.

  x2 = number of part­time employees beginning at 12:00 p.m.

9 ­ 29
 Chapter 9

  x3 = number of part­time employees beginning at 1:00 p.m.
  x4 = number of part­time employees beginning at 2:00 p.m.
  x5 = number of part­time employees beginning at 3:00 p.m.
  x6 = number of part­time employees beginning at 4:00 p.m.
  x7 = number of part­time employees beginning at 5:00 p.m.
  x8 = number of part­time employees beginning at 6:00 p.m.

Each part­time employee assigned to a four­hour shift will be paid $7.60 (4 hours)  =  $30.40.
­
Min 30.4x1 + 30.4x2 + 30.4x3 + 30.4x4 + 30.4x5 + 30.4x6 + 30.4x7 + 30.4x8 Part­Time
Employees Needed
s.t.
     x1  8 11:00 a.m.
     x1 +      x2  8 12:00 p.m.
     x1 +      x2 +      x3  7 1:00 p.m.
     x1 +      x2 +      x3 +      x4  1 2:00 p.m.
     x2 +      x3 +      x4 +      x5  2 3:00 p.m.
     x3 +      x4 +      x5 +      x6  1 4:00 p.m.
     x4 +      x5 +      x6 +      x7  5 5:00 p.m.
     x5 +      x6 +      x7 +      x8  10 6:00 p.m.
     x6 +      x7 +      x8  10 7:00 p.m.
     x7 +      x8  6 8:00 p.m.
     x8  6 9:00 p.m.
­
xj  0  j = 1,2,...8

Full­time employees reduce the number of part­time employees needed.

A portion of The Management Scientist solution to the model follows.

OPTIMAL SOLUTION

Objective Function Value =           608.000 

      Variable             Value             Reduced Costs   
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­ 
         X1                    8.000                  0.000 
         X2                    0.000                  0.000 
         X3                    0.000                  0.000 
         X4                    0.000                  0.000 
         X5                    2.000                  0.000 
         X6                    0.000                  0.000 

9 ­ 30
 Linear Programming Applications

         X7                    4.000                  0.000 
         X8                    6.000                  0.000 

     Constraint        Slack/Surplus           Dual Prices    
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­
          1                    0.000                ­18.400 
          2                    0.000                  0.000 
          3                    1.000                  0.000 
          4                    7.000                  0.000 
          5                    0.000                ­18.400 
          6                    1.000                  0.000 
          7                    1.000                  0.000 
          8                    2.000                  0.000 
          9                    0.000                ­18.400 
         10                    4.000                  0.000 
         11                    0.000                  0.000 

The optimal schedule calls for
8 starting at 11:00 a.m.
2 starting at 3:00 p.m.
4 starting at 5:00 p.m.
6 starting at 6:00 p.m.

b. Total daily salary cost = $608

There are 7 surplus employees scheduled from 2:00 ­ 3:00 p.m. and 4 from 8:00 ­ 9:00 p.m. 
suggesting the desirability of rotating employees off sooner.

c. Considering 3­hour shifts

Let x denote 4­hour shifts and y denote 3­hour shifts where 

y1 = number of part­time employees beginning at 11:00 a.m.
y2 = number of part­time employees beginning at 12:00 p.m.
y3 = number of part­time employees beginning at 1:00 p.m.
y4 = number of part­time employees beginning at 2:00 p.m.
y5 = number of part­time employees beginning at 3:00 p.m.
y6 = number of part­time employees beginning at 4:00 p.m.
y7 = number of part­time employees beginning at 5:00 p.m.
y8 = number of part­time employees beginning at 6:00 p.m.
y9 = number of part­time employees beginning at 7:00 p.m.

Each part­time employee assigned to a three­hour shift will be paid $7.60 (3 hours)  =  $22.80

New objective function:

9 ­ 31
Chapter 9

8 9
min  30.40 x j   22.80 yi
j 1 i 1

Each constraint must be modified with the addition of the yi variables.  For instance, the first 
constraint becomes

x1 + y1  8

and so on.  Each yi appears in three constraints because each refers to a three hour shift.  The 
optimal solution is shown below.

x8 = 6 y1 = 8
y3 = 1
y5 = 1
y7 = 4      

Optimal schedule for part­time employees:

4­Hour Shifts 3­Hour Shifts
x8 = 6 y1 = 8
y3 = 1
y5 = 1
y7 = 4

Total cost reduced to $501.60.  Still have 20 part­time shifts, but 14 are 3­hour shifts.  The surplus 
has been reduced by a total of 14 hours. 

26. a.
Min E
s.t.
          wg +          wu +          wc +           ws = 1
   48.14wg +  34.62wu +  36.72wc +   33.16ws  48.14
   43.10wg +  27.11wu +  45.98wc +   56.46ws  43.10
      253wg +     148wu +     175wc +      160ws  253  
       41wg +      27wu +      23wc +       84ws  41   
  ­285.2E +     285.2w +   162.3wu +   275.7wc +    210.4ws  0    
g
­123.80E + 1123.80w + 128.70w + 348.50wc + 154.10ws  0    
g u
­106.72E +   106.72w +  64.21wu + 104.10wc +   104.04w  0 
g s

9 ­ 32
 Linear Programming Applications

wg, wu, wc, ws  0
b. Since wg = 1.0, the solution does not indicate General Hospital is relatively inefficient.

c. The composite hospital is General Hospital.  For any hospital that is not relatively inefficient, the 
composite hospital will be that hospital because the model is unable to find a weighted average of 
the other hospitals that is better.

27. a.
Min E
     
s.t.
                wa +         wb +        wc +         wd +        we +        wf +         wg = 1
         55.31wa + 37.64wb + 32.91wc + 33.53wd + 32.48we + 48.78wf +  58.41wg  33.53
        49.52wa + 55.63wb + 25.77wc + 41.99wd + 55.30we + 81.92wf + 119.70w  41.99
g
            281wa +    156wb +    141wc +    160wd +    157we +   285wf +     111wg  160
              47wa +       3wb +     26wc +     21wd +     82we +    92wf +      89wg  21
­250E+310wa + 278.5wb + 165.6wc + 250wd + 206.4we + 384wf + 530.1wg  0
­316E+134.6wa + 114.3wb + 131.3wc + 316wd + 151.2we + 217wf + 770.8wg  0
 ­94.4E+116wa + 106.8wb + 65.52wc + 94.4wd + 102.1we + 153.7wf + 215wg  0

wa,  wb,  wc,  wd,  we,  wf,  wg   0

b. E   = 0.924
wa = 0.074
wc = 0.436
we = 0.489
All other weights are zero.

c. D is relatively inefficient
Composite requires 92.4 of D's resources.

d. 34.37 patient days (65 or older)
41.99 patient days (under 65)

e. Hospitals A, C, and E.

28. a. Make the following changes to the model in problem 27.

New Right­Hand Side Values for
Constraint 2  32.48
Constraint 3  55.30
Constraint 4 157
Constraint 5  82

9 ­ 33
 Chapter 9

New Coefficients for E in
Constraint 6 ­206.4
Constraint 7 ­151.2
Constraint 8 ­102.1

b. E = 1;  we = 1;  all other weights = 0

c. No; E = 1 indicates that all the resources used by Hospital E are required to produce the outputs of 
Hospital E.

d. Hospital E is the only hospital in the composite.  If a hospital is not relatively inefficient, the 
hospital will make up the composite hospital with weight equal to 1.

29. a.
Min E
s.t.
         wb +       wc +       wj +       wn +       ws = 1  
3800w + 4600wc + 4400wj + 6500wn + 6000ws  4600  
b
   25wb  +    32wc +    35wj +    30wn +    28ws  32  
    8wb  +   8.5wc +     8wj +    10wn +     9ws  8.5
­  110E +    96wb +   110wc +   100wj +   125wn +   120ws  0 
­   22E +    16wb +   22wc  +    18wj +    25wn +    24ws  0 
­1400E +  850wb + 1400wc + 1200wj + 1500wn + 1600ws  0 

wb,  wc,  wj,  wn,  ws   0

b.

OPTIMAL SOLUTION

Objective Function Value =             0.960 

      Variable             Value             Reduced Costs   
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­ 
          E                    0.960                  0.000 
         WB                    0.175                  0.000 
         WC                    0.000                  0.040 
         WJ                    0.575                  0.000 
         WN                    0.250                  0.000 
         WS                    0.000                  0.085 

     Constraint        Slack/Surplus           Dual Prices    
   ­­­­­­­­­­­­­­     ­­­­­­­­­­­­­­­      ­­­­­­­­­­­­­­­­­­
          1                    0.000                  0.200 
          2                  220.000                  0.000 
          3                    0.000                 ­0.004 
          4                    0.000                 ­0.123 
          5                    0.000                  0.009 

9 ­ 34
 Linear Programming Applications

          6                    1.710                  0.000 
          7                  129.614                  0.000 

c. Yes; E = 0.960 indicates a composite restaurant can produce Clarksville's output with 96% of 
Clarksville's available resources.

d. More Output (Constraint 2 Surplus) $220 more profit per week.
Less Input

Hours of Operation 110E = 105.6 hours
FTE Staff 22E ­ 1.71 (Constraint 6 Slack) = 19.41
Supply Expense 1400E ­ 129.614 (Constraint 7 Slack) = $1214.39

The composite restaurant uses 4.4 hours less operation time, 2.6 less employees and $185.61 less 
supplies expense when compared to the Clarksville restaurant.

e. wb = 0.175, wj = 0.575, and wn = 0.250.  Consider the Bardstown, Jeffersonville, and New Albany 
restaurants.

30. a. If the larger plane is based in Pittsburgh, the total revenue increases to $107,849. If the larger plane
is based in Newark, the total revenue increases to $108,542. Thus, it would be better to locate the
larger plane in Newark.

Note: The optimal solution to the original Leisure Air problem resulted in a total revenue of
$103,103. The difference between the total revenue for the original problem and the problem that
has a larger plane based in Newark is $108,542 - $103,103 = $5,439. In order to make the decision
to change to a larger plane based in Newark, management must determine if the $5,439 increase in
revenue is sufficient to cover the cost associated with changing to the larger plane.

b. Using a larger plane based in Newark, the optimal allocations are:

PCQ = 33 PMQ = 23 POQ = 43

PCY = 16 PMY= 6 POY = 11
NCQ = 26 NMQ = 56 NOQ = 39
NCY = 15 NMY = 7 NOY = 9
CMQ = 32 CMY = 8
COQ = 46 COY = 10

The differences between the new allocations above and the allocations for the original Leisure Air
problem involve the five ODIFs that are boldfaced in the solution shown above.

c. Using a larger plane based in Pittsburgh and a larger plane based in Newark, the optimal
allocations are:

PCQ = 33 PMQ = 44 POQ = 45

PCY = 16 PMY= 6 POY = 11
NCQ = 26 NMQ = 56 NOQ = 39
NCY = 15 NMY = 7 NOY = 9
CMQ = 37 CMY = 8
COQ = 44 COY = 10

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The differences between the new allocations above and the allocations for the original Leisure Air
problem involve the four ODIFs that are boldfaced in the solution shown above. The total revenue
associated with the new optimal solution is $115,073, which is a difference of $115,073 - $103,103
= $11,970.

d. In part (b), the ODIF that has the largest bid price is COY, with a bid price of $443. The bid price
tells us that if one more Y class seat were available from Charlotte to Myrtle Beach that revenue
would increase by $443. In other words, if all 10 seats allocated to this ODIF had been sold,
accepting another reservation will provide additional revenue of $443.

31. a. The calculation of the number of seats still available on each flight leg is shown below:

ODIF Original Seats Seats

ODIF Code Allocation Sold Available
1 PCQ 33 25 8
2 PMQ 44 44 0
3 POQ 22 18 4
4 PCY 16 12 4
5 PMY 6 5 1
6 POY 11 9 2
7 NCQ 26 20 6
8 NMQ 36 33 3
9 NOQ 39 37 2
10 NCY 15 11 4
11 NMY 7 5 2
12 NOY 9 8 1
13 CMQ 31 27 4
14 CMY 8 6 2
15 COQ 41 35 6
16 COY 10 7 3

Flight Leg 1: 8 + 0 + 4 + 4 + 1 + 2 = 19
Flight Leg 2: 6 + 3 + 2 + 4 + 2 + 1 = 18
Flight Leg 3: 0 + 1 + 3 + 2 + 4 + 2 = 12
Flight Leg 4: 4 + 2 + 2 + 1 + 6 + 3 = 18

Note: See the demand constraints for the ODIFs that make up each flight leg.

b. The calculation of the remaining demand for each ODIF is shown below:

ODIF Original Seats Seats

ODIF Code Allocation Sold Available
1 PCQ 33 25 8
2 PMQ 44 44 0
3 POQ 45 18 27
4 PCY 16 12 4
5 PMY 6 5 1
6 POY 11 9 2
7 NCQ 26 20 6
8 NMQ 56 33 23
9 NOQ 39 37 2

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 Linear Programming Applications

10 NCY 15 11 4
11 NMY 7 5 2
12 NOY 9 8 1
13 CMQ 64 27 37
14 CMY 8 6 2
15 COQ 46 35 11
16 COY 10 7 3

c. The LP model and solution are shown below:

MAX
178PCQ+268PMQ+228POQ+380PCY+456PMY+560POY+199NCQ+249NMQ+349NOQ+385NCY+444NMY
+580NOY+179CMQ+380CMY+224COQ+582COY

S.T.

1) 1PCQ+1PMQ+1POQ+1PCY+1PMY+1POY<19
2) 1NCQ+1NMQ+1NOQ+1NCY+1NMY+1NOY<18
3) 1PMQ+1PMY+1NMQ+1NMY+1CMQ+1CMY<12
4) 1POQ+1POY+1NOQ+1NOY+1COQ+1COY<18
5) 1PCQ<8
6) 1PMQ<1
7) 1POQ<27
8) 1PCY<4
9) 1PMY<1
10) 1POY<2
11) 1NCQ<6
12) 1NMQ<23
13) 1NOQ<2
14) 1NCY<4
15) 1NMY<2
16) 1NOY<1
17) 1CMQ<37
18) 1CMY<2
19) 1COQ<11
20) 1COY<3

OPTIMAL SOLUTION

Objective Function Value = 15730.000

Variable Value Reduced Costs

-------------- --------------- ------------------
PCQ 8.000 0.000
PMQ 1.000 0.000
POQ 3.000 0.000
PCY 4.000 0.000
PMY 1.000 0.000
POY 2.000 0.000
NCQ 6.000 0.000

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NMQ 3.000 0.000

NOQ 2.000 0.000
NCY 4.000 0.000
NMY 2.000 0.000
NOY 1.000 0.000
CMQ 3.000 0.000
CMY 2.000 0.000
COQ 7.000 0.000
COY 3.000 0.000

Note: The values shown above provide the allocations for the remaining seats available. The bid
prices for each ODIF are provide by the deal prices in the following output.

Constraint Slack/Surplus Dual Prices

-------------- --------------- ------------------
1 0.000 4.000
2 0.000 70.000
3 0.000 179.000
4 0.000 224.000
5 0.000 174.000
6 0.000 85.000
7 24.000 0.000
8 0.000 376.000
9 0.000 273.000
10 0.000 332.000
11 0.000 129.000
12 20.000 0.000
13 0.000 55.000
14 0.000 315.000
15 0.000 195.000
16 0.000 286.000
17 34.000 0.000
18 0.000 201.000
19 4.000 0.000
20 0.000 358.000

32. a. Let CT = number of convention two-night rooms

CF = number of convention Friday only rooms
CS = number of convention Saturday only rooms
RT = number of regular two-night rooms
RF = number of regular Friday only rooms
RS = number of regular Saturday only room

b./c.The formulation and output obtained using The Management Scientist is shown below.

LINEAR PROGRAMMING PROBLEM

MAX 225CT+123CF+130CS+295RT+146RF+152RS

S.T.

1) 1CT<40

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 Linear Programming Applications

2) 1CF<20
3) 1CS<15
4) 1RT<20
5) 1RF<30
6) 1RS<25
7) 1CT+1CF>48
8) 1CT+1CS>48
9) 1CT+1CF+1RT+1RF<96
10) 1CT+1CS+1RT+1RS<96

OPTIMAL SOLUTION

Objective Function Value = 25314.000

Variable Value Reduced Costs

-------------- --------------- ------------------
CT 36.000 0.000
CF 12.000 0.000
CS 15.000 0.000
RT 20.000 0.000
RF 28.000 0.000
RS 25.000 0.000

Constraint Slack/Surplus Dual Prices

-------------- --------------- ------------------
1 4.000 0.000
2 8.000 0.000
3 0.000 28.000
4 0.000 47.000
5 2.000 0.000
6 0.000 50.000
7 0.000 -23.000
8 3.000 0.000
9 0.000 146.000
10 0.000 102.000

OBJECTIVE COEFFICIENT RANGES

Variable Lower Limit Current Value Upper Limit

------------ --------------- --------------- ---------------
CT 123.000 225.000 253.000
CF 95.000 123.000 146.000
CS 102.000 130.000 No Upper Limit
RT 248.000 295.000 No Upper Limit
RF 123.000 146.000 193.000

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RS 102.000 152.000 No Upper Limit

RIGHT HAND SIDE RANGES

Constraint Lower Limit Current Value Upper Limit

------------ --------------- --------------- ---------------
1 36.000 40.000 No Upper Limit
2 12.000 20.000 No Upper Limit
3 11.000 15.000 23.000
4 18.000 20.000 23.000
5 28.000 30.000 No Upper Limit
6 21.000 25.000 28.000
7 46.000 48.000 56.000
8 No Lower Limit 48.000 51.000
9 68.000 96.000 98.000
10 93.000 96.000 100.000

d. The dual price for constraint 10 shows an added profit of $50 if this additional reservation is
accepted.

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