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    5320 Assignment

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    Charlotte Ellen
    This document describes three optimization tasks: 1) Scheduling production and purchases of five fabrics at a textile mill to maximize profit. The optimal solution allocates production across loom types and purchases to generate $62,531 profit. 2) Assigning customer check deposits across six lockbox locations to minimize interest loss. The optimal solution assigns regions to Dallas and New York to achieve $224,000 total loss. 3) A brief report on the group's process for collaboratively completing the two optimization problems over weekly meetings to discuss solutions in Excel and reporting in Word.

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    5320 Assignment

    Uploaded by

    Charlotte Ellen
    319 views6 pages
    This document describes three optimization tasks: 1) Scheduling production and purchases of five fabrics at a textile mill to maximize profit. The optimal solution allocates production across loom types and purchases to generate $62,531 profit. 2) Assigning customer check deposits across six lockbox locations to minimize interest loss. The optimal solution assigns regions to Dallas and New York to achieve $224,000 total loss. 3) A brief report on the group's process for collaboratively completing the two optimization problems over weekly meetings to discuss solutions in Excel and reporting in Word.

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    This document describes three optimization tasks: 1) Scheduling production and purchases of five fabrics at a textile mill to maximize profit. The optimal solution allocates production across loom types and purchases to generate $62,531 profit. 2) Assigning customer check deposits across six lockbox locations to minimize interest loss. The optimal solution assigns regions to Dallas and New York to achieve $224,000 total loss. 3) A brief report on the group's process for collaboratively completing the two optimization problems over weekly meetings to discuss solutions in Excel and reporting in Word.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    319 views6 pages

    5320 Assignment

    Uploaded by

    Charlotte Ellen
    This document describes three optimization tasks: 1) Scheduling production and purchases of five fabrics at a textile mill to maximize profit. The optimal solution allocates production across loom types and purchases to generate $62,531 profit. 2) Assigning customer check deposits across six lockbox locations to minimize interest loss. The optimal solution assigns regions to Dallas and New York to achieve $224,000 total loss. 3) A brief report on the group's process for collaboratively completing the two optimization problems over weekly meetings to discuss solutions in Excel and reporting in Word.

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    © All Rights Reserved
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    of 6

    Task 1: Scottsville Textile Mill Scheduling

    (1.1) Formulate the problem


    Defining the decision variables:
    M1D =Number of Fabric 1 make by Dobbie loom
    M2D = Number of Fabric 2 make by Dobbie loom
    M3D = Number of Fabric 3 make by Dobbie loom
    M3R = Number of Fabric 3 make by Regular loom
    M4D = Number of Fabric 4 make by Dobbie loom
    M4R = Number of Fabric 4 make by Regular loom
    M5D = Number of Fabric 5 make by Dobbie loom
    M5R = Number of Fabric 5 make by Regular loom
    B1 = Number of Fabric 1 purchased
    B2 = Number of Fabric 2 purchased
    B3= Number of Fabric 3 purchased
    B4= Number of Fabric 4 purchased
    B5= Number of Fabric 5 purchased
    (1.2)&(1.3) optimal production schedule
    Profits from make:
    Fabric
    Selling price
    Variable cost
    ($/yard)
    ($/yard)
    1
    0.99
    (0.66)
    2
    0.86
    (0.55)
    3
    1.10
    (0.49)
    4
    1.24
    (0.51)
    5
    0.7
    (0.5)
    Profits from buy:
    Fabric
    Selling price
    Purchase price
    ($/yard)
    ($/yard)

    Profit
    ($/yard)
    0.33
    0.31
    0.61
    0.73
    0.2
    Profit
    ($/yard)

    1
    0.99
    0.8
    0.19
    2
    0.86
    0.7
    0.16
    3
    1.10
    0.6
    0.50
    4
    1.24
    0.7
    0.54
    5
    0.70
    0.7
    0
    Production times in hours per yard:
    Fabric
    Dobbie
    Regular
    (hours/yard)
    (hours/yard)
    1
    1/4.63=0.215983 2
    1/4.63=0.215983 3
    1/5.23=0.191205 1/5.23=0.191205
    4
    1/5.23=0.191205 1/5.23=0.191205
    5
    1/4.17=0.239808 1/4.17=0.239808
    1

    Defining the constraints


    Demand constraints
    M1D+ B1=16500
    M2D + B2=22000
    M3D +M3R +B3=62000
    M4D +M4R +B4=7500
    M5D +M5R +B5=62000
    Loom constraints
    Dobbie:
    0.215983M1D + 0.215983M2D + 0.191205M3D + 0.191205M4D + 0.239808M5D 5760
    (Dobbie hours available: 8Loom *30 days *24 hour/day =5760)
    Regular:
    0.191205M3R + 0.191205M4R + 0.239808M5R 21600
    (Regular hours available: 30Loom* 30days* 24hours/day =21600)
    Nonnegativity conditions
    M1D ,M2D ,M3D ,M3R ,M4D ,M4R ,M5D ,M5R ,B1 ,B2 ,B3 ,B4 ,B5 0
    (1.3)
    after entering all appropriate parameters and choosing any necessary options for
    model, the solver determined that the optimal amount for the final production
    schedule is:
    Fabric Make by

    Dobbie

    4668.8

    22000

    Regular

    27707.808

    7500

    62000

    11831.2

    34292.192

    Fabric purchase

    Fabric1 purchase 11831.2 yards


    Fabric1 Dobbie 4668.8 yards
    Fabric2 purchase 0
    Fabric2 Dobbie 22000 yards
    Fabric3 purchase 34292.192 yards
    Fabric3 Dobbie 0
    Fabric3 regular 27707.808
    Fabric4 purchase 0
    Fabric4 Dobbie 0 ; Fabric4 regular 7500 yards
    Fabric5 purchase 0
    Fabric5 Dobbie 0
    Fabric5 regular 62000 yards
    assignment for each fabric
    loom assignment for fabric 1:
    2

    Dobbie: 4668.8/4.63= 1008.3801


    loom assignment for fabric 2:
    Dobbie: 22000/4.63= 4751.6199
    loom assignment for fabric 3:
    Regular: 27707.808/5.23=5297.8601
    loom assignment for fabric 4:
    regular: 7500/5.23= 1434.0344
    loom assignment for fabric 5:
    regular: 62000/4.17= 14868.10552
    (1.4)Maximize profit objective function:
    =0.33M1D+0.31M2D+0.61M3D+0.61M3R+0.73M4D+0.73M4R+0.2M5D+0.2M5R+0.19B1+0
    .16B2+0.50 B3+0.54B4+0B5
    the objective in an optimization problem is represented mathematically by an
    objective function, the objective function in Scottsville Textile Mill Scheduling
    problem expresses the mathematical relationship between the decision variable(such
    as the amount of the each fabric should be produced) in the model to determined the
    maximize profit of the production. As the solve determined that the maximize profit is
    $ 62531.49, and the profit from make is equal to $43137.47, profit from buy is equal
    to $ 19394.02.
    (1.5) Alternative way - Cost Minimizing
    Costs from make:
    Costs from buy:
    Fabric
    Variable cost ($/yard)
    1
    (0.66)
    2
    (0.55)
    3
    (0.49)
    4
    (0.51)
    5
    (0.5)
    Fabric
    Purchase price ($/yard)
    1
    0.8
    2
    0.7
    3
    0.6
    4
    0.7
    5
    0.7
    Minimize cost objective function:
    =0.66M1D+0.55M2D+0.49M3D+0.49M3R+0.51M4D+0.51M4R+0.5M5D+0.5M5R+0.8B1+0.
    7B2+ 0.6B3+0.7B4+0.7B5
    The minimizing cost value is 93623.5.
    Above solution shows that production quantity for all fabric types are same in Profit
    3

    maximization and Cost minimization model. therefore, both the profit maximization
    and cost minimization models will provide the same optimal solution. However, the
    coefficients of the objective function are different for the two model. In the cost
    minimization model, the coefficients are costs per unit, therefore, the solutions allows
    company to fill the order at a minimum cost of $ 93623.5. on the other hands, in the
    profit maximization model, the coefficients are profit contributions per unit from
    make or buy.
    Task 2: The MasterDebt Lockbox
    (2.1) Formulate the problem:
    First we must calculate the losses due to lost interest for each possible assignment.
    Defining the decision variables:
    If the central sends to Sacramento, then on average there will be 4* 45= 180 (in
    $1,000s) in process on any given day, interest rate of 15%, this corresponds to a
    yearly loss of 27 (in $1,000s) then We can calculate the losses for the other
    possibilities in a similar fashion to get follow table.
    Annual Interest Loss($1,000s)
    Sacramento
    Denver
    Chicago
    Dallas
    New York
    Atlanta
    Central
    27.00
    13.50
    13.50
    13.50
    20.25
    20.25
    Mid-Atlantic
    58.50
    39.00
    29.25
    39.00
    19.50
    19.50
    Midwest
    22.50
    15.00
    22.50
    15.00
    37.50
    30.00
    Northeast
    81.00
    54.00
    27.00
    67.50
    27.00
    40.50
    Northwest
    21.00
    31.50
    52.50
    42.00
    63.00
    73.50
    Southeast
    84.00
    48.00
    36.00
    24.00
    48.00
    24.00
    Southwest
    18.00
    27.00
    54.00
    18.00
    63.00
    54.00
    Let Xij=be the decision to select or unselect check sent from the region i to lockbox j,
    where i=1,2,3,4,5,6,7;j=1,2,3,4,5,6.

    Let Yi= be the decision to select or unselected lockbox j , where i= Sacramento(S),


    Denver (D), Chicago(C), Dallas(Da), New York(NY), Atlanta(A).

    Minimize total yearly loss objective function:


    =27X11+13.5X12+13.5X13+13.5X14+20.25X15+20.25X16..
    +25YS+30YD+35YC+35YDA+30YNY+35YA
    MIN

    where RI
    CI
    (2.2)&(2.3) Optimal solution
    Defining the constraints:
    Binary constraints:
    All Xij must be binary
    All YI must be binary
    All Xij must be integer
    Nonnegative condition:
    X11+X12+X13+X14+X15+X16 =1
    X21+ X22+X23+X24+X25+X26 =1
    X31+X32+X33+X34+X35+X36=1
    X41+X42+X43+X44+X45+X46=1
    X51+X52+X53+X54+X55+X56=1
    X61+X62+X63+X64+X65+X66=1
    Or,
    Linking constrain( with big M)
    X11+X21+X31+X41+X51+X61+X717YS OR X11+X21+X31+X41+X51+X61+X71-7Ys0
    X12+X22+X32+X42+X52+X62+X727YD OR X12+X22+X32+X42+X52+X62+X72-7YD0
    X13+X23+X33+X43+X53+X63+X737YC OR X13+X23+X33+X43+X53+X63+X73-7YC0
    X14+X24+X34+X44+X54+X64+X747YDA OR X14+X24+X34+X44+X54+X64+X74-7YDA0
    X15+X25+X35+X45+X55+X65+X757YNY OR X15+X25+X35+X45+X55+X65+X75-7YNY0
    X16+X26+X36+X46+X56+X66+X767YA OR X16+X26+X36+X46+X56+X66+X76-7YA0

    (2.4) The total costs are 224,000 and MasterDebt should use Dallas for Central,
    Midwest, Northwest, Southeast and Southwest while New York for Mid-Atlantic and
    Northeast.
    (2.5) The total costs are 227,500 when a maximum of four regions could be assigned
    to any lockbox location and MaterDebt should use Sacramento for Midwest,
    Northwest and Southwest while Atlanta for Central, Northeast, Southeast, MidAtlantic.
    Task 3: Brief Report
    The objectives of the assignment are to complete two problems with three tasks. We
    have established a schedule since week 3 and made regular meeting time at three
    times a week which was right after the class on Monday, Tuesday and the other one
    was held during weekend with two hours each time discussions. Based on the
    exercises and knowledge learnt from lectures and tutorials, we solved the problems
    5

    with Excel together during the meeting and discussed how to put them into the Word.
    In conclusion, our group has been effective at collaborating on this assignment and
    successful at developing a plan while each member has been following through with
    their responsibilities.

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