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Econ 445 Problem Set 3 Linear Programming: Heinz2

This document provides instructions for 5 problems involving linear programming to be solved using Excel. The problems cover topics like minimizing costs for napkin purchasing and laundering for catering multiple dinners, minimizing transportation costs for shipping products between factories and warehouses, minimizing labor costs for scheduling part-time employees at a restaurant, determining upper and lower bounds for residents suffering from multiple ailments at a retirement village, and maximizing profits from blending grape juices to make different types of wine. Students need to correctly solve and answer questions for 4 problems to earn an A, 3 problems for a B, and 2 problems for a C. The problems are due on November 13, 2000.

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Urbi Roy Barman
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75 views4 pages

Econ 445 Problem Set 3 Linear Programming: Heinz2

This document provides instructions for 5 problems involving linear programming to be solved using Excel. The problems cover topics like minimizing costs for napkin purchasing and laundering for catering multiple dinners, minimizing transportation costs for shipping products between factories and warehouses, minimizing labor costs for scheduling part-time employees at a restaurant, determining upper and lower bounds for residents suffering from multiple ailments at a retirement village, and maximizing profits from blending grape juices to make different types of wine. Students need to correctly solve and answer questions for 4 problems to earn an A, 3 problems for a B, and 2 problems for a C. The problems are due on November 13, 2000.

Uploaded by

Urbi Roy Barman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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http://www.msubillings.edu/BusinessFaculty/Harris/Ec445PS3F00.

htm

Econ 445
Problem Set 3
Linear Programming

The following are to be done on Excel using the solver add-in. Make sure
that you check the boxes indicating that you want the solver to "Assume
linear model," and "Assume non-negative" in the Solver Options.

Quantitative requirements for this assignment are:


To earn an A, you must correctly solve the linear programs and answer the
questions on 4 problems.
To earn a B, you must correctly solve the linear programs and answer the
questions on 3 problems.
To earn a C, you must correctly solve the linear programs and answer the
questions on 2 problems.
To earn a D, you must correctly solve the linear programs and answer the
questions on 1 problem
Extra credit will be awarded if you successfully complete more than 4
problems. The problems are ordered roughtly according to their difficulty.

Problems are due on Monday, November 13, 2000

1. A caterer has undertaken a contract for a series of 6 dinners, one each on 6


successive nights, to be given by an exclusive New York Club. The caterer
must purchase napkins especially for these dinners because the club has
requested a special type of napkin that has not been used before, and will not
be used again. On each day, the number of meals served will be: day 1: 100
meals; day 2: 200 meals; day 3: 300 meals; day 4: 400 meals; day 5: 175
meals; and day 6: 75 meals. One napkin is required for each meal on any
given day. Two types of laundry service are available to the caterer. Regular
service takes 4 days (e.g., laundry sent at the end of a meal on day 1 can be
used again for a meal on day 5) and costs $1.00 per napkin. A faster service
takes 2 days (e.g., laundry sent at the end of a meal on day 1 can be ready for
use on the 3rd day's meal), and costs $1.65 per napkin. New napkins cost $13
each. The caterer wants to minimize the costs associated with purchasing and
laundering napkins. Set up and solve a linear programming problem that
determines the number of napkins to buy, and the number that will be sent
each day to the regular and to the fast laundry.

Interpret the "shadow price" associated each of the constraints dealing with
the minimum number of napkins required for each meal.

2. Download an Excel file named Heinz2.xls (by clicking on the filename). This is


a transportation cost minimization problem that involves 10 factories and 20
warehouses. The spreadsheet contains all transportation cost data, the
demand requirements of the warehouses, and the production capabilities of
the factories. Set up and solve the linear programming problem that indicates
how much must be shipped from each factory to each warehouse so as to
minimize transportation costs. (Hint: use of the SUMPRODUCT function will
be very helpful here.)

3. The Western Family Steakhouse offers a variety of low-cost meals and quick
service. Other than management, the steakhouse operates with two full-time
employees who work 8 hour per day. The rest of the employees are part-time
workers who are scheduled for 3-hour or 4-hour shifts during peak meal times.
On Saturday, the Steakhouse is open from 11:00 A.M. to 10:00 P.M.
Management wants to develop a schedule for part-time employees that will
minimize labor costs and still provide excellent customer service. The average
wage rate for part-time employees is $6.25 per hour. The total number of part-
time and full-time employees needed varies with the time of day as shown in
the table below.

TOTAL NUMBER
TIME OF EMPLOYEES
NEEDED
11:00 AM - noon 9
Noon - 1:00 PM 11
1:00 PM - 2:00
8
PM
2:00 PM - 3:00
3
PM
3:00 PM - 4:00
3
PM
4:00 PM - 5:00
3
PM
5:00 PM - 6:00
8
PM
6:00 PM - 7:00
13
PM
7:00 PM - 8:00
12
PM
8:00 PM - 9:00
8
PM
9:00 PM - 10:00
7
PM
One of the full-time employees comes on duty at 11:00 AM, works for 4 hours,
takes and hour off, and returns to work another 4 hours. The other full-time
employee comes to work at 1:00 PM and works the same type of 4-hours-on,
1-hour-off, 4-hours-on pattern.

a. Develop a minimum cost schedule for part-time employees.


b. What is the total payroll for part-time employees? How many part-time
shifts are needed? Use the surplus variables to comment on the
desirability of scheduling at least some of the part-time employees for 2-
hour shifts.

4. A village for retired persons has a population of 10,000 people. The residents
suffer from four different ailments. The percentage having these ailments are
50%, 75%, 70%, and 70% respectively, but there is no single person who has
all four ailments. Formulate and solve the linear programs to find an upper
bound and a lower bound on the percentage of this population who suffers
from more than one ailment.

5. You are asked by a Napa Valley enologist to assist in deciding how to blend
four different grape juices ('98 Napa Cabernet, '97 Napa Cabernet, '98
Sonoma Cabernet, and '98 Carignan) into three types of wine ('98 Vintage
Napa Valley Cabernet, Non-Vintage Cabernet, and Non-Vintage "Burgundy").
The number of bottles of juice available and the costs per bottle of the four
grape juices are:

'98 Napa Cabernet 50,000 bottles $1.10


'97 Napa Cabernet 40,000 bottles $1.15
'98 Sonoma
60,000 bottles $0.93
Cabernet
'98 Carignan 150,000 bottles $0.52
The wholesale prices (per bottle) at which the wines can be sold are:

'98 Vintage Napa Valley Cabernet $3.10


Non-Vintage Cabernet $2.00
Non-Vintage "Burgundy" $1.05
The juices have the following fermentation properties:

Acidity (gm/100
  Sugar Alcohol
ml)
'98 Napa Cabernet 0.65 0.11% 13.50%
'97 Napa Cabernet 0.72 0.27% 15.10%
'98 Sonoma
0.55 0.37% 11.90%
Cabernet
'98 Carignan 0.82 0.10% 13.80%
You have the following constraints:

 Cabernet wines cannot exceed an acidity level of 0.75 gm/100 ml.


 Sugar content of Vintage Cabernets cannot exceed 0.20%; for Non-
Vintage Cabernets, the limit is 0.30%.
 Any wine labeled as a Cabernet must contain at least 51% Cabernet
juice.
 Any wine that is vintage dated must contain only juices from the vintage
year.
 Any wine that is "place" labeled (e.g., Napa Valley) must contain at
least 75% juices from that place.
 The minimum alcohol content for any wine is 10%; the maximum
alcohol content for any wine is 14%.

a. What is the profit maximizing blend of wines for this enologist to make?
b. If additional amounts of '98 Cabernet juice (from either Napa or Sonoma)
could be purchased for $3.98 per bottle, would you recommend a
purchase?

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