Advance LP Applications - I

Dr Yamini S.
Faculty of Operations and
Analytics

3 March 2022 Yamini | Advanced Operations Research 1

Taco Quatro can make their entire menu out of their fantastic four
Mexican ingredients, cheese, meat, beans and tortillas. A
Nacholupa needs 2 ounces of cheese, 4 ounces of beans and 3
tortillas. A Quesatilla needs 4 ounces of cheese, 2 ounces of meat
and 1 tortilla. A Enchinacho requires 2 ounces each of cheese,
meat, and beans plus 3 tortillas. Their newest menu item, the
Burritaco needs 4 ounces of cheese, 2 ounces of meat and one
tortilla. A Nacholupa sells for $2.75, a Quesatilla sells for $2, an
Enchinacho sells for $3 and the new Burritaco sells for $4. The
assistant manager checks the cooler one fine Monday morning and
sees that they have 400 ounces of cheese, 150 ounces of meat, 400
ounces of beans and 250 tortillas on hand.
3 March 2022 Yamini | Advanced Operations Research 2
Andy Tyre manages Tyreʹs Wheels, Inc. Andy has received an
order for 1000 standard wheels and 1200 deluxe wheels for next
month, and for 750 standard wheels and 1000 deluxe wheels the
following months. He must fill all the orders. The cost of regular
time production for standard wheels is $25 and for deluxe wheels,
$40. Overtime production costs 50% more. For each of the next
two months there are 1000 hours of regular time production and
500 hours of overtime production available. A standard wheel
requires .5 hour of production time and a deluxe wheel, .6 hour.
The cost of carrying a wheel from one month to the next is $2.

3 March 2022 Yamini | Advanced Operations Research 3

Tots Toys makes a plastic tricycle that is composed of three major
components: a handlebar-front wheel-pedal assembly, a seat and
frame unit, and rear wheels. The company has orders for 12,000
of these tricycles. Current schedules yield the following
information. The company obviously does not have the resources
available to manufacture everything needed for the completion of
12000 tricycles so has gathered purchase information for each
component. Develop a linear programming model to tell the
company how many of each component should be manufactured
and how many should be purchased in order to provide 12000
fully completed tricycles at the minimum cost.

3 March 2022 Yamini | Advanced Operations Research 4

 Requirements Cost to Cost to
Component Plastic Time Space Manufacture Purchase
Front 3 10 2 8 12
Seat/Frame 4 6 2 6 9
Rear wheel .5 2 .1 1 3
(each)
Available 50000 160000 30000

3 March 2022 Yamini | Advanced Operations Research 5

The Meredith Ribbon Company produces paper and fabric decorative
ribbon which it sells to paper products companies and craft stores.
The demand for ribbon is seasonal information about projected
demand and production for a particular type of ribbon is given. An
inventory holding cost of $.005 is levied on every yard of ribbon
carried over from one quarter to the next. Formulate a LP model to
minimize the total cost assuming that there is no inventory at Q1.
Demand Production Cost Per Production Capacity
(yards) Yard (yards)
Quarter 1 10,000 .03 30,000
Quarter 2 18,000 .04 20,000
Quarter 3 16,000 .06 20,000
Quarter 4 30,000 .08 15,000

3 March 2022 Yamini | Advanced Operations Research 6

The Wonder Toy Company is trying to schedule production of two very
popular toys for the next three months: a rocking horse and a scooter.
Information about both toys is given below.
Begin. Invty. Required Required Production Production
Toy June 1 Plastic Time Cost Cost
Rocking Horse 25 5 2 12 1
Scooter 55 4 3 14 1.2

Plastic Time Monthly Demand Monthly Demand

Summer Available Available Horse Scooter
Schedule
June 3500 2100 220 450
July 5000 3000 350 700
August 4800 2500 600 520
3 March 2022 Yamini | Advanced Operations Research 7
Develop a model that would tell the company how many of each
toy to produce during each month. You are to minimize total
cost. Inventory cost will be levied on any items in inventory on
June 30, July 31, or August 31 after demand for the month has
been satisfied. The company wants to end the summer with 150
rocking horses and 60 scooters as beginning inventory for Sept. 1.

3 March 2022 Yamini | Advanced Operations Research 8

The Atlantic Seafood Company (ASC) is a buyer and distributor of
seafood products that are sold to restaurants and specialty seafood
outlets throughout the Northeast. ASC has a frozen storage facility
in New York City that serves as the primary distribution point for all
products. One of the ASC products is frozen large black tiger shrimp,
which are sized at 16-20 pieces per pound. Each Saturday ASC can
purchase more tiger shrimp or sell the tiger shrimp at the existing
New York City warehouse market price. The ASC goal is to buy tiger
shrimp at a low weekly price and sell it later at a higher price. ASC
currently has 20,000 pounds of tiger shrimp in storage. Space is
available to store a maximum of 100,000 pounds of tiger shrimp
each week.
3 March 2022 Yamini | Advanced Operations Research 9
Filtron Corporation produces filtration containers used in water
treatment systems. Although business has been growing, the
demand each month varies considerably. As a result, the company
utilizes a mix of part-time and full-time employees to meet
production demands. Although this approach provides Filtron with
great flexibility, it resulted in increased costs and morale problems
among employees. For instance, if Filtron needs to increase
production from one month to the next, additional part-time
employees have to be hired and trained, and costs go up. If Filtron
has to decrease production, the workforce has to be reduced and
Filtron incurs additional costs in terms of unemployment benefits
and decreased morale.
3 March 2022 Yamini | Advanced Operations Research 10
Best estimates are that increasing the number of units produced from
one month to the next will increase production costs by $1.25 per unit,
and that decreasing the number of units produced will increase
production costs by $1.00 per unit. In February Filtron produced 10,000
filtration containers but only sold 7500 units; 2500 units are currently in
inventory. The sales forecasts for March, April, and May are for 12,000
units, 8000 units, and 15,000 units, respectively. In addition, Filtron has
the capacity to store up to 3000 filtration containers at the end of any
month. Management would like to determine the number of units to be
produced in March, April, and May that will minimize the total cost of
the monthly production increases and decreases.

3 March 2022 Yamini | Advanced Operations Research 11

In addition, ASC developed the following estimates of tiger shrimp prices for
the next four weeks: Week Price/Ib
1 $6.00
2 $6.20
3 $6.65
4 $5.55

ASC would like to determine the optimal buying-storing-selling strategy for

the next four weeks. The cost to store a pound of shrimp for one week is
$0.15, and to account for unforeseen changes in supply or demand,
management also indicated that 25,000 pounds of tiger shrimp must be in
storage at the end of week 4. Determine the optimal buying/storing/selling
strategy for ASC. What is the projected four-week profit?

3 March 2022 Yamini | Advanced Operations Research 12

Seastrand Oil Company produces two grades of gasoline: regular
and high octane. Both gasolines are produced by blending two
types of crude oil. Although both types of crude oil contain the
two important ingredients required to produce both gasolines,
the percentage of important ingredients in each type of crude oil
differs, as does the cost per gallon. The percentage of ingredients
A and B in each type of crude oil and the cost per gallon are
shown.
Crude Oil Cost Ingredient A Ingredient B
1 $0.10 20% 60%
2 $0.15 50% 30%

3 March 2022 Yamini | Advanced Operations Research 13

Each gallon of regular gasoline must contain at least 40% of
ingredient A, whereas each gallon of high octane can contain at
most 50% of ingredient B. Daily demand for regular and high-
octane gasoline is 800000 and 500000 gallons, respectively. How
many gallons of each type of crude oil should be used in the two
gasolines to satisfy daily demand at a minimum cost? Round your
answers to the nearest whole number.

3 March 2022 Yamini | Advanced Operations Research 14

G and P Manufacturing would like to minimize the labor cost of
producing dishwasher motors for a major appliance
manufacturer. Although two models of motors exist, the
finished models are indistinguishable from one another; their
cost difference is due to a different production sequence. The
time in hours required for each model in each production area
is tabled here, along with the labor cost.
Model 1 Model 2
Area A 15 3
Area B 4 10
Area C 4 8
Cost 80 65

3 March 2022 Yamini | Advanced Operations Research 15

Currently labor assignments provide for 10,000 hours in each of
Areas A and B and 18000 hours in Area C. If 2000 hours are
available to be transferred from area B to Area A, 3000 hours
are available to be transferred from area C to either Areas A or
B, develop the linear programming model whose solution
would tell G&P how many of each model to produce and how
to allocate the workforce.

3 March 2022 Yamini | Advanced Operations Research 16

Super City Discount Department Store is open 24 hours a day. The
number of cashiers need in each four hour period of a day is listed
below. If cashiers work for consecutive hours, how many should be
scheduled to begin working in each period in order to minimize the
number of cashiers needed?
Period Cashiers Needed
10 p.m. to 2 a.m. 8
2 a.m. to 6 a.m. 4
6 a.m. to 10 a.m. 7
10 a.m. to 2 p.m. 12
2 p.m. to 6 p.m. 10
6 p.m. to 10 p.m. 15

3 March 2022 Yamini | Advanced Operations Research 17