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IILM Institute For Higher Education: Assignment For All Sections

The document describes three optimization problems: 1) A typewriter manufacturing company wants to maximize profits by determining how many of each typewriter model (manual, electronic, deluxe electronic) to produce given constraints on machine time, assembly time, and cash availability. 2) An electronics company wants to maximize profits from producing two computer monitors (Models A and B) given constraints on assembly time, inspection time, available labor hours, and a limited supply of microchips. 3) A water production company wants to minimize costs and maximize profits from producing drought and flood units given constraints on available materials A, B, and C.

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Rahul Dua
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70 views

IILM Institute For Higher Education: Assignment For All Sections

The document describes three optimization problems: 1) A typewriter manufacturing company wants to maximize profits by determining how many of each typewriter model (manual, electronic, deluxe electronic) to produce given constraints on machine time, assembly time, and cash availability. 2) An electronics company wants to maximize profits from producing two computer monitors (Models A and B) given constraints on assembly time, inspection time, available labor hours, and a limited supply of microchips. 3) A water production company wants to minimize costs and maximize profits from producing drought and flood units given constraints on available materials A, B, and C.

Uploaded by

Rahul Dua
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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IILM Institute for Higher Education

Operations Research (Term – IB)


Assignment for all sections
Submission Date: October 15, 2010

Q1. WELLTYPE Manufacturing Company produces three types of


typewriters; Manual typewriters, electronic typewriters and Deluxe
Electronic typewriters. All the three models are required to be machined first
and then assembled. The time required for the various models are as follows:
Types Machine Time (in Assembly Time (in
hours) hours)
Manual typewriter 15 4
Electronic typewriter 12 3
Deluxe Electronic 14 5
typewriter

The total available machine time and assembly time are 3000 hours and 1200
hours respectively. The data regarding the selling price and variable costs for
the three types are:
Manual Electronic Deluxe
Electronic
Selling Price ( ) 4100 7500 14600
Labour, material and other 2500 4500 9000
variable costs ( )

The company sells all the three types on credit basis, but will collect the
amounts on the first of next month. The labour, material and other variable
costs will have to be paid in cash. This company has taken a loan of
40,000 from a co-operative bank and this company will have to repay it to
the bank on 1st April 20XI. The TNC bank from whom this company has
borrowed 60,000 has expressed its approval to renew the loan.

The Balance Sheet of this company as on 31.3.20XI as follows:


Liabilities Assets
Equity Share Capital 1,50,000 Land 90,000
Capital Reserve 15,000 Building 70,000
General Reserve 1,10,000 Plant & Machinery 1,00,000
Profit & loss a/c 25,000 Furniture & Fixture 15,000
Long term loan 1,00,000 Vehicles 30,000
Loan from TNC bank 60,000 Inventory 5,000
Loan from co-op. bank 40,000 Receivables 50,000
Cash 1,40,000
Total 5,00,000 Total 5,00,000

The company will have to pay a sum of 10,000 towards the salary of top
management executives and other fixed overheads for the month. Interest on
long term loan is to be paid every month at 24% per annum. Interest on loans
from TNC and co-operative banks may be taken to be 1,200 for the month.
Also, this company has promised to deliver 2 manual typewriters and 8
deluxe electronic typewriters to one of its valued customers next month.
Also, make sure that the level of operations in this company is subject to the
availability of cash month. This company will also be able to sell all their
types of typewriters in the market. The senior manager of this company
desire to know as to how many units of each typewriter must be
manufactured in the factory next month as to maximise the profits of the
company. Formulate this as a linear programming problem.

Q2. IMC manufactures a variety of computing and computing related


equipment. One such product is a monitor for use with business computer
systems and IMC currently has plants to produce two models of the same
monitor: Model A which is the basic, low price monochrome monitor and
Model B which is a more sophisticated and expensive colour graphics
monitor. The company is not actually involved in manufacture directly but
rather buys the various component parts which are required for the two
models from outside suppliers. The components are then assembled by IMC
to produce Model A and Model B and each unit produced is then thoroughly
inspected for quality and performance. IMC then sells the two models under
its own brand name. There are, therefore, two basic stages to the production
process within the firm – the assembly of the product and the inspection of
the final product. Information about the resources required to produce the
two models has been obtained from both the production department and the
accounts department. Model A requires 28 hours of labour to assemble from
component parts, while Model B requires 42 hours. After assembly each
computer is then tested in the inspection department to ensure it is working
satisfactory. Because of the technical complexity of the product – and the
firm’s desire to maintain good quality control – the inspection test is time
consuming, with Model A requiring 12 hours of inspection although Model
B requires only 6 hours as more care and time is taken in assembly stage. At
present the company employs 400 people in the assembly department, each
working a 7 – hour day; 100 people are presently employed in the inspection
department but they work an 8 – hour day. The company presently operates a
6 – day working week. Current wage rates are 20 per hour in assembly
and 15 per hour in inspection. The accounts department has calculated that
in terms of the components and parts, Model A costs 355 and Model B
565 to produce. Currently the two models sell for 1,295 and 1,745
respectively per unit. An additional aspect of the problem the firm faces is
that each model requires a particular component – a microchip that forms
part of the monitor’s memory. The supplier of these chips can provide no
more than 600 in any one working week.
FORMULATE a linear programming problem which allows the production
manager to determine how many units of models A and B should be
produced weekly in order to maximize profit. Solve it by graphical method.
Q3. Water Ltd. has two products Drought and flood. To produce one unit of
Drought, three units of material A & one unit of material B and material C
respectively are required. To produce one unit of Flood, one unit of each
material A & material B respectively & two units of material C are required.
Not more than 40 units of material C can be used and at least 27 units of
material A must be used and the use of material B in total should be equal to
21. The selling price per unit of Drought and Flood are 16 & 8
respectively. The manufacturing cost per unit of Drought & Flood are 8
and 4 respectively.
You are required:
(i) To formulate the mathematical model, &
(ii) To solve it for minimise cost by graphical method.
(iii) To solve it for maximise profit by simplex method.

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