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MGM3164  QUANTITATIVE METHODS FOR BUSINESS

Test  2 (28 December 2019)

1) Mohd Danial Zulfaris, a student from UPM, starts a bags manufacturing shop. He decides to start manufacturing deluxe and standard bags.   The manufacturing operation consists of three stages: cutting, assembly, and painting.  The production hours for table and chair are as follows:

 

Cutting  (time  in hours per unit)

Sewing  (time  in  hours per unit)

Finishing      (time      in

hours per unit)

Standard bag

5

8

2

Deluxe bag

6

7.5

3

The production man-hours available each week in cutting is 240 hours, in sewing is 320 hours, and 300 hours in finsihing.  For each deluxe bag that is produced four standard bags must be produced.  The profit margin for each deluxe bag is RM 200 and for each standard bag is RM100.  Find the number of deluxe and standard bags to be produced to maximize the profit (via a graph).

2) Suniljeet  Singh Restaurant has full-time and part-time employees to run the business. There are four full-time employees.  The remaining are part-time employees.  The four full- time employees work for 8 hours per day and part-time employees work for 4 hours per day. The restaurant starts at 8 am and closes at 10 pm.  Two full–time employees come at 8 am and the remaining two come at 12 noon.  The full-time employees work for 4 hours, take a 2- hour break and continue for another 4 hours.   For example, the full-time employees who come at 8 am, work until 12 noon, take a 2-hour break and work from 2 pm to 6 pm.  The part-time employees do not have any break.  The part-time employees can come during any time slot, i.e., at 8 am, 10 am, 12 noon, 2 pm, 4 pm, or 6 pm.  The full-time employees are paid  RM  160  for  8 hours  and part-time  employees  are paid  RM  80  for 4 hours.    The minimum number of employees required in a day is as follows:

Time slot

Minimum number of employees

8am – 10am

11

10 am – 12 noon

8

12 noon – 2 pm

6

2 pm 4 pm

9

4 pm  6 pm

10

6 pm – 8 pm

8

8 pm – 10 pm

6

Formulate a LP model to minimize the wages (salaries paid to the employees).

Q 3)   The following linear programming problem has been solved by The Management Scientist.  Use the output to answer the questions.

LINEAR PROGRAMMING PROBLEM

MAX 25X1+30X2+15X3

S.T.            1)  4X1+5X2+8X3<1200

2)  9X1+15X2+3X3<1500

OPTIMAL SOLUTION

Objective Function Value =          4700.000

Variable

Value

Reduced Costs

----------

--------

------------------

X1

140.000

0.000

X2

0.000

10.000

X3

80.000

0.000

Constraint

-------------

1

2

Slack/Surplus

----------------

0.000

0.000

Dual Prices

--------------

1.000

2.333

OBJECTIVE COEFFICIENT RANGES

Variable

Lower Limit

Current Value

Upper Limit

----------

---------------

----------------

---------------

X1

19.286

25.000

45.000

X2

No Lower Limit

30.000

40.000

X3

8.333

15.000

50.000

RIGHT HAND SIDE RANGES

Constraint      Lower Limit       Current Value     Upper Limit

------------      ---------------       -----------------    ---------------

1

666.667

1200.000

4000.000

2

450.000

1500.000

2700.000

a.         Give the complete optimal solution.

b.         Which constraints are binding?

c.         What is the dual price for the second constraint?  What interpretation does this have?

d.         Over what range can the objective function coefficient of x2 vary before a new solution point becomes optimal?

e.         By how much can the amount of resource 2 decrease before the dual price will change?

f.         What would happen if the first constraint's right-hand side increased by 700 and the second's decreased by 350?