Assignment -1- (Chapter 1 & 2)
Please answer the below questions, Questions 1-3 pertain to Chapter 1, while questions 4-6 are
associated with Chapter 2.
Exercise 1:
Modeling Fuel Cost. Suppose you are going on a weekend trip to a city that is d miles away. Develop
a model that determines your round-trip gasoline costs. What assumptions or approximations are
necessary to treat this model as a deterministic model? Are these assumptions or approximations
acceptable to you?
Exercise 2:
Adding a Second Product to a Production Model. Recall the production model from
the slides:
Max 10x
s.t.
5x ≤ 40
x≥0
Suppose the firm in this example considers a second product that has a unit profit of $5 and requires
2 hours of production time for each unit produced. Use y as the number of units of product 2
produced.
a. Show the mathematical model when both products are considered simultaneously.
b. Identify the controllable and uncontrollable inputs for this model.
c. Draw the flowchart of the input–output process for this model (see Figure 1.5).
d. What are the optimal solution values of x and y?
e. Is the model developed in part (a) a deterministic or a stochastic model? Explain.
Exercise 3:
Breakeven Point for a Training Seminar. Micromedia offers computer training seminars on a variety
of topics. In the seminars each student works at a personal computer, practicing the particular activity
that the instructor is presenting. Micromedia is currently planning a two-day seminar on the use of
Microsoft Excel in statistical analysis. The projected fee for the seminar is $600 per student. The cost
for the conference room, instructor compensation, lab assistants, and promotion is $9600.
Micromedia rents computers for its seminars at a cost of $120 per computer per day.
a. Develop a model for the total cost to put on the seminar. Let x represent the number of
students who enroll in the seminar.
b. Develop a model for the total profit if x students enroll in the seminar.
c. Micromedia has forecasted an enrollment of 30 students for the seminar. How much profit
will be earned if their forecast is accurate?
d. Compute the breakeven point.
Exercise 4:
Solving Linear Program with Graphical Solution Method. Solve the following linear program using
the graphical solution procedure.
Max 5A + 5B
s.t.
1A ≤ 100
1B ≤ 80
2A + 4B ≤ 400
A, B ≥ 0
Exercise 5:
The Par, Inc., Problem (revisited). Refer to the Par, Inc., problem described in Section 2.1. Suppose
that Par, Inc., management encounters the situations described below. Assuming that Par, Inc.,
encounters each of these situations separately, what is the optimal solution and the total profit
contribution for each situation described?
a. The accounting department revises its estimate of the profit contribution for the deluxe bag
to $18 per bag.
b. A new low-cost material is available for the standard bag, and the profit contribution per
standard bag can be increased to $20 per bag. (Assume that the profit contribution of the
deluxe bag is the original $9 value.)
c. New sewing equipment is available that would increase the sewing operation capacity to 750
hours. (Assume that 10A + 9B is the appropriate objective function.)
Exercise 6:
Writing a Linear Program in Standard Form and Solving. Consider the linear program below and
answer the following questions.
Max 3A + 4B
s.t.
–1A + 2B ≤ 8
1A + 2B ≤ 12
2A + 1B ≤ 16
A, B ≥ 0
a. Write the problem in standard form.
b. Solve the problem using the graphical solution procedure.
c. What are the values of the three slack variables at the optimal solution?
Submission:
The submission deadline is Tuesday 1st of October (Hard copy).
