Quezon City University

673 Quirino Hi- way, San Bartolome, Novaliches, Quezon City

In Partial Fulfillment
of the Requirement in the
Management Science

By:

Alce, Riza Mae

Cacay, Angelika
Duco, Jhoana Marielle
Garcia, Roselyn
Ricahuerta, Gaila Marie
Suarez, Bea Angelica

November 2019
I. COMPANY PROFILE

WG Caña is a service entity that aims to provide clean drinking water with its convenient water

refilling station for a half-decade now, established at Bagong Silangan in the year 2014. They chose to put

up this business because the owner believes that clean and purified water is of the necessities and the

capital investment is expected to return faster, having a starting capital of P 300,000.

II. PROBLEM STATEMENT

WG Caña, a water refilling station that produces water-gallon and water-gallon jugs, wants to know

the business’ optimal product mix. In order to produce the right amount of barrels of water with its selling

price of ₱ 35.00 each gallon to maximize its profit, it has to take into consideration the time (minutes),

demand (pieces), and the direct (cubic meter) and indirect costs(pesos).

Demand Time Direct Cost Indirect Cost

Water-gallon 60 15 0.1 100
Water-gallon jug 10 15 0.9 50
Availability 200 8 hours 1 350
III. APPLICATION OF MANAGEMENT SCIENCE

Step1. Given

Product
Constraint Water-Gallons Water-Gallons Jug Sign Availability
Demand 60 pieces 10 pieces ≤ 200 pieces
Time 15 minutes 15 minutes ≤ 480 minutes
Direct Cost 0.1 cubic meter 0.9 cubic meter ≤ 1 cubic meter
Indirect Cost ₱ 100 ₱ 50 ≤ ₱ 350
Profit (Z) ₱ 35 ₱ 35 = MAX

GRAPHICAL

Step1. Given

MAX Z = 35X1 + 35X2

Subject to
60 X1 + 10 X2 ≤ 200 (3.33, 0) (0, 20)
15 X1 + 15 X2 ≤ 480 (32, 0) (0, 32)
0.1 X1 + 0.9 X2 ≤ 1 (10, 0) (0, 1.11)
100 X1 + 50 X2 ≤ 350 (0, 3.5) (0, 7)
X1 & X2 ≥ 0 and must be integers
Step3. Graph

Corner Points

A. (0, 0) Z= 0

B. (3.33, 0) Z= 116.55

C. (3.12, 0.76) Z= 135.88

D. (0, 1.11) Z= 38.85

ANOTHER APPROACH: SIMPLEX METHOD

Step1. Given

MAX Z = 35X1 + 35X2

Subject to
60 X1 + 10 X2 ≥ 200
15 X1 + 15 X2 ≤ 480
0.1 X1 + 0.9 X2 ≥1
100 X1 + 50 X2 ≤ 350
X1 & X2 ≥ 0 and must be integers
Step2. Standardize
MAX Z = 35 X1 + 35X2 + 0S1 + 0S2 + 0S3 + 0S4
Subject to
70X1 + 10X2 + S1 + = 200
15 X1 + 15 X2 + S2 = 480
0.9 X1 + 0.1 X2 + S3 = 1
100 X1 + 50 X2 + S4 = 420
Step3. Simplex

Iteration #0

BV X1 X2 S1 S2 S3 S4 RHS M.R.
S1 60 10 1 0 0 0 200 10/3
S2 15 15 0 1 0 0 480 32
S3 1/10 9/10 0 0 1 0 1 10
S4 100 50 0 0 0 1 350 7/2
Z -35 -35 0 0 0 0 0

Initial Solution:

X1= 0, X2=0,S1= 200,S2= 480, S3= 1, S4= 350, and Z= 0

Iteration #1
 BV X1 X2 S1 S2 S3 S4 RHS M.R.
X1 1 1/6 1/60 0 0 0 10/3 20
S2 0 25/2 -1/4 1 0 0 430 172/5
S3 0 53/60 -1/600 0 1 0 2/3 40/53
S4 0 100/3 -5/3 0 0 1 50/3 1/2
Z 0 -175/6 7/12 0 0 0 350/3

Initial Solution:

X1= 20, X2=0,S1= 0,S2= 430, S3= 2/3, S4= 50/3, and Z= 350/3

Iteration #2

BV X1 X2 S1 S2 S3 S4 RHS M.R.
X1 1 0 1/40 0 0 -1/200 13/4 130
S2 0 0 3/8 1 0 -3/8 1695/ 1130
4
S3 0 0 17/400 0 1 -53/2000 9/40 90/17
X2 0 1 -1/20 0 0 3/100 1/2 (-)
Z 0 0 -7/8 0 0 7/8 525/4

Initial Solution:

X1= 13/4 or 3.25, X2=1/2 or 0.5,S1= 0,S2= 1695/4 or 423.75, S3= 9/40 or 0.225, S4= 0, and

Z= 525/4 or 131.25
Iteration #3

BV X1 X2 S1 S2 S3 S4 RHS
X1 1 0 0 0 -10/17 9/850 53/17
S2 0 0 0 1 -150/17 -12/85 7170/17
S1 0 0 1 0 400/17 -53/85 90/17
X2 0 1 0 0 20/17 -1/850 13/17
Z 0 0 0 0 350/17 28/85 2310/17

Optimal Solution

X1= 53/17 or 3.12, X2=13/17 or 0.76,S1= 90/17 or 5.29,S2= 7170/17 or 421.76, S3= 0, S4= 0, and Z=2310/17
or 135.88

Cutting Plane: Graphical

LP1
Optimal
Solution

Corner Points

A. (0,0) Z= 0

LP2
C. (1,1) Z= 70

D. (0,1) Z= 35
B. (3,0) Z= 105
Conclusion

WG Caña should yield 3 water-gallons to maximize its profit for ₱ 105.00.

RECOMMENDATIONS:

NETWORK MODEL: SHORTEST ROUTE Given: (m)

We also want to add recommendation for the owner in terms of the route of their delivery since

their cost or expenses are not directly affected by the number of the orders they produce. We want to let

them know that their delivery time can be lessened and that saved time be used in producing products,

because we noticed that the higher the available time the greater revenue can be generated.

23
49 m
61 m

35
43 m 2
30 m
46 m
22 3 24
19 m 28 m 22 m
34 62 m 21 27
27 m
24 m 4
42 m 25
1
5 25 m
34 m
28m 26 20
6 36 m 81m
120 m
27m 120 m

7 28

150 m
20 m 19
57m 40m
29
37 m
32
82 m
8 180m
18
22m 36m

95m 44m
9 33 30
36m
39m 80 m
10 17
 11
23m 12
19m 39m
41m 13
31
15m 14
18m 15 16
35m
10m

Legend: = WG Water Station = Street Corner = Customers location

Conclusion:

If the delivery is for No. 24

Shortest Route = 1 – 21 – 24
49m =27 +22
If the delivery is for No. 25
Shortest Route = 1 – 20 – 25
59m = 34+ 25
If the delivery is for No. 26
Shortest Route = 1 – 21 – 2 – 3 – 26
165m = 27+46+30+62
If the delivery is for No. 27
Shortest Route = 1 – 20 – 28 – 19 – 27
171m = 34+36+20+81

If the delivery is for No. 28

Shortest Route = 1 – 20 – 28
70m = 34+36

If the delivery is for No. 29

Shortest Route =1 – 21 – 2 – 3 – 4 – 29
251m = 27+46+30+28+120

If the delivery is for No. 30

Shortest Route = 1 – 20 – 28 – 19 – 18 – 17 – 16 – 15 – 30
300m = 34+36+20+37+44+39+10+80

If the delivery is for No. 31

Shortest Route = 1 – 20 – 28 – 19 – 18 – 17 – 16 – 15 – 14 – 31
273m = 34+36+20+37+44+39+10+35+18

If the delivery is for No. 32

Shortest Route = 1 – 21 – 2 – 3 – 4 – 5 – 6 – 7 – 32
250m = 27+46+30+28+24+28+27+40

If the delivery is for No. 33

Shortest Route = 1 – 21 – 2 – 3 – 4 – 5 – 6 – 7 – 8 – 33
303m = 27+46+30+28+24+28+27+57+36
If the delivery is for No. 34
Shortest Route = 1 – 21 – 2 – 3 – 4 – 5 – 34
197m = 27+46+30+28+24+42

If the delivery is for No. 35

Shortest Route =1 – 21 – 2 – 23 – 35
183m = 27+46+61+49
STRATEGIES:

Starting a water refilling station is easy, but success in this business depends a lot on how you

market and manage your business.

According to FFE Magazine, here are the tips to beat competition:

 Market your Outlet

 Offer 24/7 Service
 Be friendly
 Respond to Orders Quickly
 Offer Quality Service