Chemical Plant
Data
Product A Product B Aval. Resource
Prod. Cost $2 $3
Processing time 2 1 600
Total prod. 350
Product A 125
Decision variables
Product A Product B
250 100
Objective function
Min total prod. Cost z= $800.0
Constraints LHS RHS
1) Prodction of A 250 >= 125
2) Total production 350 >= 350
3) Processing time 600 <= 600
4) Decision variables are non-negative
Decision point:
In the coming month, the chemical plant should produce 250 gallons of product A and 100 gallons of
product B, which gives the minimal production cost of $800.
Retailing-711
Data
Profit/carton
Own brand $0.97
Local brand $0.83
National brand $0.69
Ava. Shelf space 351
Local supply 120
National vs. own 3
Decision variables
Own brand 59
Local brand 115
National brand 177
Objective function
Max profit z= $274.81
Constraints LHS RHS
1) Shelf space 351 <= 351
2) Local supply 115 <= 120
3) National vs. own+local 3 >= 0
4) National vs own 0 >= 0
5) Decision variables are non-negative & integers
Decision point:
7/11 should order 59 cartons of own brands, 115 cartons of local brands,
177 cartons of national brands, which gives the maximal profit of $274.81.
Media Selection
Data
Max times
# of potential Exposure
Cost ($)/ad available/mont
Advitising Media customers reached quality units
h
Day TV 1,000 $1,500 15 65
Evening TV 2,000 $3,000 10 90
Morning Journal 1,500 $400 25 40
Sunday Press 2,500 $1,000 4 60
Radio 300 $100 30 20
Budget $30,000
At least 10 TV commercials
At least 50,000 customers
No more than $18,000 on TV ads
Decision variables
Day TV 10
Evening TV 0
Morning Journal 25
Sunday Press 2
Radio 30
Objective function
Max exposure quality units z= 2370
Constraints LHS RHS
1) Total budget 30000 <= $30,000
2) Max. time of each medium 10 <= 15
0 <= 10
25 <= 25
2 <= 4
30 <= 30
3) TV budget 15000 <= $18,000
4) Times of ads on TV 10 >= 10
5) Customers reached 61500 >= 50000
6) Decision variables are non-negative and integers
Decision point:
The company should do 30 ads of daytime TV, 25 ads of
morning journal, 2 ads of Sunday press, and 30 ads of Radio.
The maximal exposure quality units are 2370.
Stock Portfolios
Data
Expected Annual Cost for block of
Stock Company Name Returns ($1,000s) shares ($1,000s)
1 Trans-Texas oil $50 $480
2 British Petroleum $80 $540
3 Dutch Shell $90 $680
4 Huston Drilling (Texas) $120 $1,000
5 Texas Petroleum $110 $700
6 San Diego (California) $40 $510
7 Califorlina Petro $75 $900
Total investment $3,000
Decision variables
Stock Company Name
1 Trans-Texas oil 0
2 British Petroleum 0
3 Dutch Shell 1
4 Huston Drilling (Texas) 1
5 Texas Petroleum 1
6 San Diego (California) 1
7 Califorlina Petro 0
Objective function
Max. expected annual returns z= $360
Constraints LHS RHS
1) Texas company req. 2 >= 2
2) Foreign company req. 1 <= 1
3) Investment fund 2890 <= $3,000
4) Cal. Company req. 1= 1
5) Decision variables are binary
Decision point
Ashley should recommend the client to choose Dtuch shell Huston Drill, Textas
Petro, and Sna Diego Oil. The maximal annual returns is $0.36 million.
Capital Budgeting
Data
Project NPV Year 1 Year 2
Catalytic Converter $25,000 $8,000 $7,000
Software $18,000 $6,000 $4,000
Warehouse Expansion $32,000 $12,000 $8,000
Avaliable funds $20,000 $16,000
Will work on this problem in the class on Oct 21 as a review