1.

- Production Planning Problem

The company COMPAQ needs to meet the demand for computers from its
clients (large corporations and educational institutions) for the next 4 quarters.
Currently, COMPAQ has 5000 computers in inventory. The expected demand for the
next quarters are 7000, 15000, 10000, and 8000. COMPAQ has the material and the capacity
to produce up to 10,000 computers each quarter, at a cost of US$ 2000 per
computer

By employing overtime from the staff, up to 2500 more computers can be produced.
individual cost of US$ 2200. The computers produced in a quarter can be
used to meet the demand of that period, or remain in inventory to be
used later. Each computer in inventory has an additional cost of US$100 for
period to reflect storage costs. How can COMPAQ meet its demand
at minimum cost?

Model:

In this case, the decision to be made corresponds to the production of computers per quarter.
How can computers be manufactured during regular hours and is it convenient to do so overtime?
separate both types

of production in different variables. In addition, it must be decided in each period how many
save units

in inventory. Let's define the following variables ( t = 1 : : : 4):

xt = production in period t during normal hours

yt = production in the period t in overtime

it = inventory at the end of period t

According to the defined variables, we can formulate the complete model considering the
quarterly balance between what was produced, what came from the previous period in inventory, and the
demand of the

respective quarter.

Min z = 2000(x1 + x2 + x3 + x4) + 2200(y1 + y2 + y3 + y4) + 100(i1 + i2 + i3)

Subject to Restrictions

5000 + x1 + y1 = 7000 + i1

i1 + x2 + y2 = 15000 + i2

i2 + x3 + y3 = 10000 + i3

i3 + x4 + y4 = 8000

xt 10000 t
yt 2500 t

xt; yt; it 0 t

For the previous formulation, it has been assumed that each computer is completely manufactured.
during normal hours or overtime, and the variables can be non-integer. Evidently
None of these assumptions are correct in the real situation, but it constitutes a good
approach to the problem.

SOLUTION TO PRODUCTION PLANNING PROBLEM

DECISION VARIABLES

x1 x2 x3 x4 y1 y2 y3 y4 i1 i2 i3 Totals

restriction 1 1 0 0 0 1 0 0 0 -1 0 0 2,000

restriction 2 0 1 0 0 0 1 0 0 1 -1 0 15,000

restriction 3 0 0 1 0 0 0 1 0 0 1 -1 10,000

restriction 4 0 0 0 1 0 0 0 1 0 0 1 8,000

restriction 5 1 0 0 0 0 0 0 0 0 0 0 10,000

restriction 6 0 1 0 0 0 0 0 0 0 0 0 10,000

restriction 7 0 0 1 0 0 0 0 0 0 0 0 6,000

restriction 8 0 0 0 1 0 0 0 0 0 0 0 2.250

restriction 9 0 0 0 0 1 0 0 0 0 0 0 2.500

restriction 10 0 0 0 0 0 1 0 0 0 0 0 2,500

restriction 11 0 0 0 0 0 0 1 0 0 0 0 0

restriction 12 0 0 0 0 0 0 0 1 0 0 0 0

Objective function (Xi) 2.000 2.000 2.000 2,000 2,200 2.200 2,200 2.200 100 100 100 65,990,000

SOLUTION 10,000 8.400 6,000 2.250 2.500 2.500 0 0 10,500 6,400 0

2.- Staffing Planning Problem

The nurses at a hospital arrive every 4 hours and work in continuous 8-hour shifts.
Thethe administration has decided on the idea of defining 6 shift changes per day to minimize the
distractions and communication problems that occur during shift changes.
The hospital has conducted an analysis of the work required during each of the six periods.
of the day.
The characteristics of each period are as follows:

Number
Minimum
HORA DEL DIA Período Nurses

2 AM - 6 AM 1 25

6 AM - 10 AM 2 60

10 AM - 2 PM 3 50

2 PM - 6 PM 4 35

6 PM - 10 PM 5 55

10 PM - 2 AM 6 40

Nurses who start working in periods 2, 3, and 4 earn US$40 per day, and those
those that start in periods 1, 5, and 6 earn US$50 a day. How many nurses should
to start to work each shift to minimize labor costs?

Model:

In this case, we can identify the number of nurses Ni as the decision variable.
begins to work in shift 'i' (i = 1 ::: 6). In this way, the objective function is:
z = 50N1 + 40N2 + 40N3 + 40N4 + 50N5 + 50N6

Evidently, the previous function needs to be minimized. To build the constraints it is

convenient resorting to a graphical representation of the shifts:
From the previous graph, it can be observed that in each shift, the nurses who started in
said shift, but also those who started in the previous shift. Therefore, the restrictions
the minimum personal per shift is:

N1 + N2 60

N2 + N3 50

N3 + N4 35

N4 + N5 55

N5 + N6 40

N6 + N1 25

Finally, the model is completed with the sign constraints:

I am 0

SOLUTION TO PERSONAL PLANNING PROBLEM

DECISION VARIABLES

N1 N2 N3 N4 N5 N6 Totals Symbol

restriction 1 1.00 1.00 0.00 0.00 0,0 0.00 60.0 >=

restriction 2 0.00 1.00 1.00 0,00 0,0 0.00 55.0 >=

restriction 3 0.00 0.00 1.00 1.00 0,0 0.00 35.0 >=

 restriction 4 0.00 0,00 0.00 1.00 1.0 0.00 55.0 >=

restriction 5 0.00 0.00 0.00 0.00 1.0 1.00 40.0 >=

restriction 6 1.00 0.00 0.00 0,00 0,0 1.00 25.0 >=

restriction 7 0.00 0.00 0.00 0.00 0,0 0.00 0,0 <=

restriction 8 0.00 0.00 0.00 0.00 0,0 0.00 0,0 <=

restriction 9 0,00 0.00 0.00 0.00 0,0 0.00 0,0 <=

restriction 10 0.00 0.00 0.00 0.00 0,0 0.00 0,0 <=

Objective function (Xi) 50,00 40,00 40,00 40,00 50,00 50,00 5,850.0

SOLUTION 5,0 55,0 0,0 35,0 20.0 20.0

3.- Mixing Problem

An oil refinery produces two types of unleaded gasoline: regular and premium, which
sells its chain of service stations at US$12 and US$14 per barrel, respectively.
Both types are prepared from the national refined oil inventory and imported oil.
what the refinery has and must meet the specifications presented in the following table:

Maximum pressure Octane rating Maximum demand Minimum deliveries

steam minimum barrel/week barrel/week

REGULAR 23 88 100,000 50,000

EXTRA 23 93 20,000 5,000

The characteristics of the inventory of refined petroleum are as follows:

Pressure Octane rating Inventory Cost

steam barrel [US$/barrel]

NATIONAL 25 87 40,000 8

IMPORTADO 15 98 60,000 15

Formulate a linear programming model that allows maximizing weekly profit.

refinery
 Model:

In order to formulate a model for the problem, we will assume that there are no losses in the
refinement process and how both octane rating and vapor pressure can be mixed
linearly.

According to the previous assumption, we must define variables that allow us to control that
the proportion of each type of oil that would be used to produce each type of gasoline would be as follows:

xij = cantidad de petróleo refinado tipo i (i = 1; 2) para fabricar gasolina j (j = 1; 2)

Let's consider the previous variables in barrels, in order to use the proportions.
delivered in the statement.

As the selling price of each gasoline and the cost of each oil is known, the function
the objective is reduced to maximizing the difference between income and costs, that is, the profits.

Max 12(x11 + x21) + 14(x12 + x22) - 8(x11 + x12) - 15(x21 + x22)

Next, we build the constraints. The constraints regarding inventory

the availability and demand for each type of gasoline explain themselves:

x11 + x12 40000 (Inventory oil type 1)

x21 + x22 60000 (Inventory of type 2 oil)

x11 + x21 50000 (Minimum demand for type 1 gasoline)

x11 + x21 100000 (Maximum demand for type 1 gasoline)

x12 + x22 5000 (Minimum demand for type 2 gasoline)

x12 + x22 20000 (Maximum demand for type 2 gasoline)

The restrictions on vapor pressure and minimum octane rating must be normalized with respect to the
total quantity produced, which is not necessarily the maximum or minimum amount that can be produced

25x11+15x21 23 (Maximum vapor pressure gasoline type 1)

x11+x21

25x12+15x22 23 (Maximum vapor pressure gasoline type 2)

x12 + x22
87x11+98x21 88 (Minimum octane for type 1 gasoline)

x11 + x21

87x12+98x22 88 (Minimum octane rating for type 2 gasoline)

x12 + x22

Finally, the model is complete with the sign conditions:

xij 0ixj

SOLUTION TO MIXTURE PROBLEM

VARIABLES DE DECISION Limit of the

X11 X12 X21 X22 TotalSymbolRestriction

restriction 1 1.0 1.0 0,0 0,0 40,000 <= 40,000

restriction 2 0,0 0,0 1.0 1.0 15,000 <= 60,000

restriction 3 1.0 0,0 1,0 0,0 50,000 >= 50,000

restriction 4 1.0 0,0 1,0 0,0 50,000 <= 100,000

restriction 5 0,0 1,0 0,0 1.0 5,000 >= 5,000

restriction 6 0,0 1.0 0,0 1,0 5,000 <= 20,000

restriction 7 2.0 0,0 -8.0 0,0 -40.000 <= 0

restriction 8 0,0 2.0 0,0 -8.0 0 <= 0

restriction 9 -1,0 0,0 10.0 0,0 104.000 >= 0

restriction 10 0,0 -1,0 0,0 10.0 6.000 >= 0

Objective function (Xi) 4.0 6.0 -3.0 -1,0 125,000

SOLUTION 36.000 4,000 14,000 1,000

4.- SOLUTION TO THE GASOLINE BLENDING PROBLEM

The company Sunco Oil produces two types of gasoline (NORMAL and SUPER), each of them
mixing two types of crude (Light and Heavy). The selling prices of each barrel of
Gasoline is 7,000 bolívares and 6,000 bolívares, respectively. On the other hand, the prices of
the purchase of the two types of crude oil is 4,500 bolivars and 3,500 bolivars per barrel,
respectively. Up to 5,000 barrels of each crude can be purchased daily. The two types
Gasoline differs in its octane index and sulfur content. The mixture of petroleum
crude oil used to obtain SUPER gasoline must have an average octane rating
of at least 10 and at most 1% sulfur. The mixture that is obtained for gasoline
NORMAL must have an average octane rating of at least 8 and at most 2% of
sulfur. The octane ratings and the sulfur content of the two types of crude oil are

Crudo LIVIANO: Octano=12 Azufre=0.5%

Heavy Crude: Octane=6 Sulfur=2%

The transformation of a barrel of oil into a barrel of gasoline costs 400 Bolívares, and
the Sunco refinery can produce daily, up to 9,000 barrels of gasoline. Customers
Sunco currently demands 3,000 barrels of regular gasoline and 2,000 barrels of gasoline.
Great. However, Sunco has the ability to stimulate demand through the
advertising, so that for every bolívar invested in the advertising of each type of gasoline,
the daily demand for that type of gasoline increases by 0.1 barrels (if, for example, it consumes 1000
bolivars in Super gasoline, increases the demand for Super gasoline by 1000*0.1=100
barrels). Formulate the linear programming problem that allows SUNCO OIL to maximize
your daily earnings and solve the same using the SOLVER program in EXCEL.

Limit of the

x11 x12 x21 x22 Totals Symbol restriction

restriction 1 1,000 1,000 1,000 1,000 5000,0 <= 9,000.0

restriction 2 1,000 1,000 0,000 0,000 3000.0 <= 3,000.0

restriction 3 0.000 0.000 1.000 1.000 2000.0 <= 2,000.0

restriction 4 1,000 0,000 1,000 0,000 2333.3 <= 5,000.0

restriction 5 0,000 1,000 0,000 1,000 2666,7 <= 5,000.0

restriction 6 0.015 0.000 0.000 0.000 15.0 >= 0,0

restriction 7 0.000 0.000 0.005 -0.010 0,0 >= 0,0

restriction 8 2,000 -1,000 0,000 0,000 0,0 >= 0,0

restriction 9 0.000 0.000 1.000 -2.000 0,0 >= 0,0

restriction 10 0.000 0.000 0.000 0.000 0,0 <= 0,0

Objective function
(Xi)
2.100 3.100 1.100 2.100 11.166.667
 SOLUTION 1000,0 2000,0 1333,3 666,7

When performing the sensitivity analysis, incorporating the effect of advertising on the
increase in the demand for REGULAR and PREMIUM gasoline, the following solution is obtained
applying Excel SOLVER:

Limit of

x11 x12 x21 x22 x31 x32 Totals Symbol restriction

restriction 1 1,000 1,000 1,000 1,000 1,000 1,000 9000.0 <= 9,000.0

restriction 2 1,000 1,000 0,000 0,000 -1,000 0,000 3000.0 <= 3,000.0

restriction 3 0.000 0.000 1.000 1.000 0.000 -1.000 2000,0 <= 2,000.0

restriction 4 1,000 0,000 1,000 0,000 1,000 0,000 5000.0 <= 5,000.0

restriction 5 0.000 1.000 0.000 1.000 0.000 1.000 4000.0 <= 5,000.0

restriction 6 0.015 0.000 0.000 0.000 0.000 0.000 25.0 >= 0,0

restriction 7 0.000 0.000 0.005 -0.010 0.000 0.000 0,0 >= 0,0

restriction 8 2,000 -1,000 0,000 0,000 0,000 0,000 0,0 >= 0,0

restriction 9 0.000 0.000 1.000 -2.000 0.000 0.000 0,0 >= 0,0

restriction 10 0.000 0.000 0.000 0.000 0.000 0.000 0,0 <= 0,0

Objective function
(Xi) 2.100 3.100 1.100 2.100 -10 -10 16,680,000

SOLUTION 1666,7 3333,3 1333,3 666,7 2000,0 0,0

By analyzing the results from the input of both SOLVER tables, it is observed that performing the
Advertising increases profits by 49.3% from 11,166,667 Bs. to 16,680,000.
This justifies the spending on advertising as it substantially improves profits.
SUNCO OIL.