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Assignment 4 - Version 2

This document provides instructions and details for 4 linear programming problems to solve using Excel. The problems involve determining optimal production quantities and allocation of funds to maximize profits given various constraints. The student is asked to formulate and solve each problem on a separate Excel worksheet and submit the written models and Excel file.

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Mankiller123 Burton
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Download as DOCX, PDF, TXT or read online on Scribd
74 views

Assignment 4 - Version 2

This document provides instructions and details for 4 linear programming problems to solve using Excel. The problems involve determining optimal production quantities and allocation of funds to maximize profits given various constraints. The student is asked to formulate and solve each problem on a separate Excel worksheet and submit the written models and Excel file.

Uploaded by

Mankiller123 Burton
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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MN 216 Applied Decision Models

Assignment 5

You need to upload the written-out model as well as the excel file on LEO. Please set up each problem
on a separate worksheet on the same excel file.

1. Varis Manufacturing makes three components for sale to refrigeration companies. The components
are processed on two machines: a shaper and a grinder. The times (in minutes) required on each
machine are as follows:

Component Shaper Grinder

1 6 4

2 4 5

3 4 2

The shaper is available for 120 hours, and the grinder for 110 hours. No more than 200 units of
component 3 can be sold, but up to 1,000 units of each of the other components can be sold. In fact, the
company already has orders for 600 units of component 1 that must be satisfied. The profit
contributions for components 1,2, and 3 are $8, $6, and $9, respectively.

The company wants to maximize profits. Formulate and solve this problem on Excel to determine the
production quantities for the three components. (Hint: 3 decision variables, 6 constraints)

2. The Kalo Fertilizer Company produces two brands of lawn fertilizer – Super Two and Green Grow – at
plants in Fresno, California and Dearborn, Michigan. The plant at Fresno has resources available to
produce 5000 pounds of fertilizer daily; the plant at Dearborn has enough resources to produce 6,000
pounds daily. The cost per pound of producing each brand at each plant is as follows:

PLANT
Product Fresno Dearborn
Super Two $2 $4
Green Grow $2 $3

The company has a daily budget of $45,000 for both plants combined. Based on past sales, the company
knows the maximum demand (converted to a daily basis) is 6000 pounds for Super Two and 7000
pounds for Green Grow. The selling price is $9 per pound for Super Two and $7 per pound for Green
Grow. The company wants to know the number of pounds of each brand of fertilizer to produce at each
plant in order to maximize profit.
3. BBT Savings Bank has $1 million in new funds that must be allocated to home loans, personal loan,
and automobile loans. The annual rates of return for the three types of loans are 7% for home loans,
12% for personal loans, and 9% for automobile loans. The bank’s planning committee has decided that
at least 40% of the new funds must be allocated to home loans. In addition, the planning committee has
specified that the amount allocated to personal loans cannot exceed 60% of the amount allocated to
automobile loans.

Formulate a linear programming model that can be used to determine the amount of funds BBT should
allocate to each type of loan to maximize the total annual return for the new funds.

4. Mentor Inn is a motel that provides two types of rooms with three rental classes: Super Saver, Deluxe,
and Business. The profit per night for each type of rental room and class is provided below:

Rental Class
Room Super Saver Deluxe Business
Type I $30 $35 -
Type II $20 $30 $40

Type I rooms do not have high speed wireless internet access and are not available for the Business
rental class. Mentor Inn’s management makes a forecast of the demand by rental class for each night in
the future. A linear programming model developed to maximize profit is used to determine how many
reservations to accept for each rental class. The demand forecast for a particular night is 130 rentals in
the Super Saver class, 60 in the Deluxe class, and 50 in the Business class. Mentor Inn has 100 Type I
rooms and 120 Type II rooms.

Formulate and solve a linear program to determine how many reservations to accept in each rental class
and how the reservations should be allocated to room types in order to maximize profits. (Hint: 5
decision variables, 5 constraints)

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