Assignment #1: Introduction to Operation Research

BBA 2020 (A & B)

Cheating or plagiarism is strictly prohibited and will result in zero marks.

You may consult relevant textbooks and course material from the internet and other
sources.
No assignment will be accepted after the deadline is over.

Only handwritten and scanned (PDF) file will be accepted (No typed assignment will be
entertained).
Q1. A company produces two products, A and B. The production process for A requires 2 units
of labor and 3 units of material, while the production process for B requires 4 units of labor
and 1 unit of material. The company has 12 units of labor and 8 units of material available. Use
the graphical method to determine the optimal production mix that maximizes profit, given that
the profit for each unit of A is $5 and for each unit of B is $4.
Q2. Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts
for special occasions. Since she has just begun this operation, she rents the equipment from a
local printing shop when necessary. The cost of using the equipment is $350. The materials
used in one shirt cost $8, and Gina can sell these for $15 each.
(a) If Gina sells 20 shirts, what will her total revenue be? What will her total variable cost be?
(b) How many shirts must Gina sell to break even? What is the total revenue for this?

Q3. Andy Mendoza makes handcrafted dolls, which he sells at craft fairs. He is considering
mass producing the dolls to sell in stores. He estimates that the initial investment for plant and
equipment will be $25,000, whereas labor, material, packaging, and shipping will be about $10
per doll. If the dolls are sold for $30 each, what sales volume is necessary for Andy to break
even?

Q4. The Elixer Drug Company produces a drug from two ingredients. Each ingredient contains
the
same three antibiotics, in different proportions. One gram of ingredient 1 contributes 3 units,
and 1 gram of ingredient 2 contributes 1 unit of antibiotic 1; the drug requires 6 units. At least
4 units of antibiotic 2 are required, and the ingredients contribute 1 unit each per gram.
At least 12 units of antibiotic 3 are required; a gram of ingredient 1 contributes 2 units, and a
gram of ingredient 2 contributes 6 units. The cost for a gram of ingredient 1 is $80, and the cost
for a gram of ingredient 2 is $50. The company wants to formulate a linear programming model
to determine the number of grams of each ingredient that must go into the drug in order to meet
the antibiotic requirements at the minimum cost.
a. Formulate a linear programming model for this problem.
b. Solve this model by using graphical analysis.
Q5. The Weemow Lawn Service wants to start doing snow removal in the winter when there
are no lawns to maintain. Jeff and Julie Weems, who own the service, are trying to determine
how much equipment they need to purchase, based on the various job types they have. They
plan to work themselves and hire some local college students on a per-job basis. Based on
historical weather data, they estimate that there will be six major snowfalls next winter.
Virtually all customers want their snow removed no more than 2 days after the snow stops
falling. Working 10 hours per day (into the night), Jeff and Julie can remove the snow from a
normal driveway in about 1 hour, and it takes about 4 hours to remove the snow from a business
parking lot and sidewalk. The variable cost (mainly for labor and gas) per job is $12 for a
driveway and $47 for a parking lot. Using their lawn service customer base as a guideline, they
believe they will have demand of no more than 40 homeowners and 25 businesses. They plan
to charge $35 for a home driveway and $120 for a business parking lot, which is slightly less
than the going rate. They want to know how many jobs of each type will maximize their profit.
a. Formulate a linear programming model for this problem.
b. Solve this model graphically.

Q6. A company produces two products, A and B. The sales volume for A is at least 80% of the
total sales of both A and B. However, the company cannot sell more than 110 units of A per
day. Both products use one raw material, of which the maximum daily availability is 300 lb.
The usage rates of the raw material are 2 lb per unit of A, and 4 lb per unit of B. The profit units
for A and B are $40 and $90, respectively. Determine the optimal product mix for the company.

Q7. Universal Claims Processors processes insurance claims for large national insurance
companies. Most claim processing is done by a large pool of computer operators, some of
whom are permanent and some of whom are temporary. A permanent operator can process 16
claims per day, whereas a temporary operator can process 12 per day, and on average the
company processes at least 450 claims each day. The company has 40 computer workstations.
A permanent operator generates about 0.5 claim with errors each day, whereas a temporary
operator averages about 1.4 defective claims per day. The company wants to limit claims with
errors to 25 per day. A permanent operator is paid $64 per day, and a temporary operator is
paid $42 per day. The company wants to determine the number of permanent and temporary
operators to hire to minimize costs.
a. Formulate a linear programming model for this problem.
b. Solve this model by using graphical analysis.
c. Solve the model by using the Simplex method.

Q8. Generate a problem (objective function, i.e., maximization or minimization, constraints)

Q9. Propose the description of a problem (comprising two variables) related to your academic
life, provide the mathematical model, and solve it using both Graphical and Simplex methods.

Q10. Discuss ten application areas of operations research (besides those discussed in the class).