MIE 611 (Operations Research 1)

Assignment

ABC Apparel produces three types of clothing for its summer collection: t-shirts, shorts, and
dresses. The company will utilize the remaining 1000 meters of fabric left in last year's summer
collection. Available labor hours are 560 and 480 machine hours. One T-shirt yields a profit of 65,
one dress of 50 and shorts of 75. Management proposed to produce at least 20 pieces of each
product for this year's summer collection. How many products of each type to make to maximize
profit with the available resources?

Decision Variables:
Let:
T = No. of T-Shirt to make
D = No. of Dress to make
S = No. of Shorts to make
Objective Function:
Pmax = 65T+50D+75S
Constraints:
Subject to:
Materials: 1000m
Labor Hours: 560hrs
Machine Hours: 480hrs
Minimum Output:
T-Shirt (T): 20
Dress (D): 20
Shorts (S): 20
Formulation of Linear Programming Model

ABC Apparel
T-Shirt Dress Shorts
(T) (D) (S)
No of units to Make:

Subject to:
Used Capacity
Materials: 2.5 3 1 0 ≤ 1000
Labor Hours: 2 3 1 0 ≤ 560
Machine Hours: 1.5 2 1 0 ≤ 480

Min Output: 20 20 20 0 ≥ 60

Max Profit
Profit/unit: 65 50 75 0
Figure 1. LP Formulation

The figure shows the linear programming method used. Here is the allocation for creating
these products: 2.5 meters of fabric, 2 hours of labor, and 1.5 hours of machine time per shirt.
Similarly, it takes 3 meters of fabric, 3 hours of labor, and 2 hours of machine time to make one
dress, and 1 meter of fabric, 1 hour of labor, and 1 hour of machine time to make one shorts. This
consumption allocation is subject to resource availability and company-imposed limits. With the
constraints mentioned above, the company will have to decide which solution is the best for
maximizing its profit.
Linear Programming Solution:

ABC Apparel
T-Shirt Dress Shorts
(T) (D) (S)
No of units to Make: 20 20 410

Subject to:
Used Capacity
Materials: 2.5 3 1 520 ≤ 1000
Labor Hours: 2 3 1 510 ≤ 560
Machine Hours: 1.5 2 1 480 ≤ 480

Min Output: 20 20 20 450 ≥ 60

Max Profit
Profit/unit: 65 50 75 33050
Figure 2a. LP Solution

The figure shows a linear programming solution for maximizing profit. To determine the
maximum profit, we use the formula Pmax = 65T+50D+75S wherein, we multiply the number of
units produced to the profit per unit of each product. Shorts has the most units to produce with
410 pieces, as the company can maximize profits here. Considering the minimum production limit
of 20 each, the company should make 20 pieces each for dresses and t-shirts. This solution gives
the maximum profit of 33,050.00 the company can get. The profit contribution for each product is
as follows; 1300 for t-shirts, 1000 for dresses, and 30750 for Shorts, which gives the maximum
profit of 33,050.00.
Sensitivity Analysis

ABC Apparel
T-Shirt Dress Shorts
(T) (D) (S)
No of units to Make: 20 20 540

Subject to:
Used Capacity
Materials: 2.5 3 1 650 ≤ 1000
Labor Hours: 2 3 1 640 ≤ 640
Machine Hours: 1.5 2 1 610 ≤ 800

Min Output: 20 20 20 580 ≥ 60

Max Profit
Profit/unit: 65 50 75 42800
Figure 2b LP Solution (New Value)

The figure shows the linear programming solution with a new set of values for the
parameters. Changes in the value of labor and machine time have a significant impact on
maximizing profits.
Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$E$4 No of units to Make: T-Shirt (T) 20 -85 65 85 1E+30
$F$4 No of units to Make: Dress (D) 20 -175 50 175 1E+30
$G$4 No of units to Make: Shorts (S) 540 0 75 1E+30 42.5

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$H$8 Materials: Used 650 0 1000 1E+30 350
$H$9 Labor Hours: Used 640 75 640 190 520
$H$10 Machine Hours: Used 610 0 800 1E+30 190

Figure 3. Sensitivity Report

The figure shows the sensitivity analysis for the product mix problem. The "Final Value"
column is the optimal solution from the specified parameters. The Saved Costs column has
negative values of -85 and -175 for T-shirts and dresses, respectively. The Objective Coefficient
column represents the profit for each product, and the allowable Increase/Decrease column
indicates how much more or less the profit for each product is. In other words, you can increase
or decrease the profit on any product and still get the same product mix of 20 T-shirts, 20 dresses,
and 540 shorts.
For constraint tables, the final value indicates the number of resources used. Shadow price
columns have null values that apply to all unbound constraints. Similarly, the allowable
Increase/decrease column means that you can add more resources, but the objective function
does not change.