Business Decision Analytics
Week 7 Problems
1. Machine Tool Production Planning. King City Inc. manufactures machine tools. The
production planner who oversees the production of four of King City’s machines needs to
determine how many of each to produce this month. The machines, TopLathe, BigPress,
Shaper, Hone each require three different common components. Each TopLathe requires 6,
each BigPress requires 4, each Shaper 8 and each Hone requires 12 of the first component.
Only 50 of the first components are available this month. Each TopLathe requires 4, each
BigPress requires 4, each Shaper 8 and each Hone requires 6 of the second component. Only
40 of the second components are available this month. Each TopLathe requires 8, each
BigPress requires 2, each Shaper 5 and each Hone requires 6 of the third component. Only 60
of the third components are available this month. The sales department requires that the total
number of machines produced in a month must be at least 5. The profit for a TopLathe is $30,
$25 for a BigPress, $35 for a Shaper and $15 for a Hone.
a. Formulate a linear programming model to determine how many of each product King City
should produce per month to maximize profit. How many unused components remain?
x i: number of machines produced per month of type i
max z=30 x 1 +25 x2 +35 x 3 +15 x 4
6 x 1+ 4 x 2 +8 x 3+ 12 x 4 ≤ 504 x1 + 4 x 2+ 8 x 3 +6 x 4 ≤ 408 x 1+ 2 x 2 +5 x3 +6 x 4 ≤ 60
x 1+ x2 + x 3 + x 4 ≥5
x1 , x2 , x3 , x4 ≥ 0
b. The ratio of the used first and third components needs to be at most 0.8.
What is the new optimal production plan?
Add:
6 x 1+ 4 x 2 +8 x 3+ 12 x 4 ≤ 0.8(8 x 1 +2 x 2 +5 x 3+ 6 x 4)
−0.4 x 1 +2.4 x 2 +4 x 3 +7.2 x 4 ≤0
The whole model:
max z=30 x 1 +25 x2 +35 x 3 +15 x 4
6 x 1+ 4 x 2 +8 x 3+ 12 x 4 ≤ 504 x1 + 4 x 2+ 8 x 3 +6 x 4 ≤ 408 x 1+ 2 x 2 +5 x3 +6 x 4 ≤ 60
x 1+ x2 + x 3 + x 4 ≥5
−0.4 x 1 +2.4 x 2 +4 x 3 +7.2 x 4 ≤0
x1 , x2 , x3 , x4 ≥ 0
c. Back to the model in question a. We have a weekly (1 month = 4 weeks) maintenance cost of
machinery to be paid if producing any positive amount of the different machines. This cost is
the same regardless of the produced amount. However, it is not paid if zero is produced of the
respective machines. The cost is $8 for TopLathe, $2 for BigPress, $3 for Shaper and $1 for
Hone. What is the new optimal production plan?
max z=30 x 1 +25 x2 +35 x 3 +15 x 4−32 y 1−8 y 2−12 y 3−4 y 4
6 x 1+ 4 x 2 +8 x 3+ 12 x 4 ≤ 504 x1 + 4 x 2+ 8 x 3 +6 x 4 ≤ 408 x 1+ 2 x 2 +5 x3 +6 x 4 ≤ 60
x 1+ x2 + x 3 + x 4 ≥5
x 1 ≤ M y 1 x 2 ≤ M y2 x 3 ≤ M y 3 x 4 ≤ M y 4
x 1 , x 2 , x 3 , x 4 ≥ 0 , y 1 , y 2 , y3 , y 4 ∈{0 , 1}
d. Back to the model in question a. How does the solution differ if instead of requiring all three
components, only two are required, but it is possible to decide which ones? Consumptions are
the same. This means we can drop the requirement for one component.
max z=30 x 1 +25 x2 +35 x 3 +15 x 4
6 x 1+ 4 x 2 +8 x 3+ 12 x 4 ≤ 50+ M y 14 x1 + 4 x 2+ 8 x 3 +6 x 4 ≤ 40+ M y 2
8 x 1+ 2 x 2 +5 x3 +6 x 4 ≤ 60+ M y 3
x 1+ x2 + x 3 + x 4 ≥5
y1 + y2 + y3 ≤ 1
x 1 , x 2 , x 3 , x 4 ≥ 0 , y 1 , y 2 , y3 ∈{0 , 1}
e. Back to the model in question a. It is possible to have more available components from the
first two types. We can get at most 5 more units of the first and at most 7 more of the second
component. The extra components costs are 3$ per unit in case of the first type and 2$ per unit
in case of the second type. It is not possible to get more of the third component. What is the
new optimal production plan?
max z=30 x 1 +25 x2 +35 x 3 +15 x 4−3 z 1−2 z2
6 x 1+ 4 x 2 +8 x 3+ 12 x 4 ≤ 50+ z 14 x1 + 4 x 2+ 8 x 3 +6 x 4 ≤ 40+ z 28 x 1+ 2 x 2 +5 x3 +6 x 4 ≤ 60
x 1+ x2 + x 3 + x 4 ≥5
z 1 ≤ 5z 2 ≤ 7
x1 , x2 , x3 , x4 , z1 , z2 ≥ 0
f. How does the solution differ in question e, if the delivery of the extra components needs to be
in entirety? This means that if more components will be available, all extra units should be
taken into consideration, thus if any amount is delivered, then the whole package needs to be
bought (still separately for the two products though).
max z=30 x 1 +25 x2 +35 x 3 +15 x 4−15 y 1−14 y 2
6 x 1+ 4 x 2 +8 x 3+ 12 x 4 ≤ 50+5 y 14 x1 + 4 x 2+ 8 x 3 +6 x 4 ≤ 40+7 y 28 x 1+ 2 x 2 +5 x3 +6 x 4 ≤ 60
x 1+ x2 + x 3 + x 4 ≥5
x 1 , x 2 , x 3 , x 4 ≥ 0 , y 1 , y 2 ∈ {0 ,1 }
g. What if in question f the extra amounts are 80 and 100 instead?
max z=30 x 1 +25 x2 +35 x 3 +15 x 4−240 y 1−200 y 2
6 x 1+ 4 x 2 +8 x 3+ 12 x 4 ≤ 50+80 y 14 x1 + 4 x 2+ 8 x 3 +6 x 4 ≤ 40+100 y 28 x 1+ 2 x 2 +5 x3 +6 x 4 ≤ 60
x 1+ x2 + x 3 + x 4 ≥5
x 1 , x 2 , x 3 , x 4 ≥ 0 , y 1 , y 2 ∈ {0 ,1 }
h. Back to the model in question a. We know that the unit profit increases if more units are
produced. After the first 3, 4, 2 and 2 units respectively, the unit profit increases to 31$, 27$,
50$ and 60$, respectively. What is the new optimal production plan?
max z=30 x 11 +31 x 12+25 x 21+27 x 22 +35 x31 +50 x 32+15 x 41+ 60 x 42
6 x 11 +6 x 12+ 4 x 21+ 4 x 22+ 8 x 31 +8 x 32+12 x 41+12 x 42 ≤ 50
4 x11 + 4 x 12+ 4 x 21+ 4 x 22 +8 x31 +8 x 32+6 x 41 +6 x 42 ≤ 40
8 x 11 +8 x 12+2 x 21+2 x 22+5 x 31+5 x 32+ 6 x 41+6 x 42 ≤60
x 11 + x 12+ x 21 + x 22+ x 31+ x 32 + x 41+ x 42 ≥5
x 11 ≥3 u1 x 12 ≤ M u1
x 21 ≥ 4 u 2 x 22 ≤ M u2
x 31 ≥ 2u 3 x 32 ≤ M u3
x 41 ≥ 2 u4 x 42 ≤ M u 4
x 11 ≤3x 21 ≤ 4 x 31 ≤ 2x 41 ≤ 2
x 11 , x 12 , x 21 , x 22 , x 31 , x 32 , x 41 , x 42 ≥ 0u1 ,u 2 , u3 ,u 4 ∈ {0 ,1 }