Exam 8: Linear Programming Applications

Production scheduling is amenable to solution by LP because it is a problem that must be solved on a regular basis.

Which of the following does not represent a factor a manager might typically consider when employing linear programming for a production scheduling?

Dr.Randy Heizer wishes to invest his retirement fund of $2,200,000 so that his return on investment is maximized, but he also wishes to keep the risk level relatively low.He has decided to invest his money in any of three possible ways: CDs that pay a guaranteed 5 percent; stocks that have an expected return of 22 percent; and a loan sharking business that is expected to return 58 percent.He has decided that the total $2,200,000 will be invested, but any part (or all)of it may be put in any of the three alternatives.Thus, he may have some money invested in all three alternatives.He has also decided to invest, at most, 50 percent of this in loansharking and at least 20 percent of this in CDs.Formulate this as a linear programming problem and carefully define all the decision variables.

Which of the following is considered a decision variable in the production mix problem of maximizing profit?

Foolish Manufacturing has three factories (1, 2, and 3)and three warehouses (A, B, and C).The table below shows the shipping costs between each factory (in dollars)and warehouse, the factory manufacturing capabilities (in 1000s), and the warehouse capacities (in 1000s).Solve this problem using Excel's Solver routine.

A media selection LP application describes a method in which media producers select customers.

The linear programming model of the production scheduling process can include the impact of hiring and layoffs, regular and overtime pay rates, and the desire to have a constant and stable production schedule over a several-month period.

Transporting goods from several origins to several destinations efficiently is called the transportation problem.

Green Acres just ran out of stock and suddenly has two emergency orders for grass seed blends: one is for 1800 pounds of normal, the other for 3300 pounds of special.At least each pound of normal should contain 60 percent annual seed, while each pound of special should contain at least 70 percent perennial seed.Green Grass has two input mixtures, A and B.Mixture A contains 80 percent perennial and 15 percent annual seed.Mixture B contains 70 percent annual and 25 percent perennial seed.Mixture A costs 85 cents per pound and mixture B costs 55 cents per pound.Solve this blending problem using Excel Solver. Let W = lbs.of mixture A used to produce the normal blend X = lbs.of mixture A used to produce the special blend Y = lbs.of mixture B used to produce the normal blend Z = lbs.of mixture B used to produce the special blend

A linear programming approach is usually used by managers involved in portfolio selection to

The shipping problem in LP is also called the

Which of the following statements is false regarding the portfolio selection problem?

A small furniture manufacturer produces tables and chairs.Each product must go through three stages of the manufacturing process: assembly, finishing, and inspection.Each table requires 3 hours of assembly, 2 hours of finishing, and 1 hour of inspection.Each chair requires 2 hours of assembly, 2 hours of finishing, and 1 hour of inspection.The profit per table is $120, while the profit per chair is $80.Currently, each week there are 200 hours of assembly time available, 180 hours of finishing time, and 40 hours of inspection time.To keep a balance, the number of chairs produced should be at least twice the number of tables.Also, the number of chairs cannot exceed six times the number of tables.How many tables and chairs should the furniture manufacturer produce to maximize profit?

In production scheduling LP problems, inventory at the end of this month is set equal to

Table 8-9 As the high bidder on a monstrous storage locker in Rancho Cucamonga, Darrell discovers much to his dismay that no collectibles or priceless works of art have been seeded in his locker. Instead he finds cases and cases of raw leather, zippers, packets of dye, and spools of thread. After some thorough research on typical prices, Darrell concludes that his cost of the leather is $2 per yard, his zipper cost if $1 per foot, the dye is $1 per packet and the thread is fifty cents per foot. They don't call him "The Gambler" for nothing, and he is determined to find a way to profit from this misfortune as well as shed the burden of his son Brandon, who isn't much of an asset in the storage wars. He sets Brandon up with a small production business and, using his connections, manages to land contracts to supply leather purses, pants, backpacks and jackets that can be dyed to match current market trends. "In fashion, one day you're in and the next day you're out," Darrell explains to Brandon as he reviewed the contracts he had arranged. "We can make enough to get you out of the house now that I have 60,000 yards of leather, 50,000 feet of zipper material, 100,000 dye packets and 200,000 feet of thread." One local distributer has placed an order for at least 5,000 purses and is willing to increase the order to a maximum of 10,000 if sales are strong. A purse requires 0.25 yards of leather, a one foot length of zipper material, one dye packet and two feet of thread. Darrell charges $41.50 for each one shipped. Another distributor is more interested in apparel and has placed orders for both pants at $33.50 and jackets at $104. They want at least 10,000 jackets up to a ceiling of 15,000 and at least 10,000 pairs of leather pants. As you might imagine, there is no limit to the number of pairs of leather pants that can be sold. A leather jacket requires 1.5 yards of leather, three feet of zipper material, two dye packets and eight feet of thread. Leather pants take a full two yards of leather, six inches of zipper material, two dye packets and six feet of thread. Yet another distributor is keen on backpacks and sees a market for at least 2,500 backpacks but is unwilling to take more than 7,500. Each backpack requires a half yard of leather, two feet of zipper material, one dye packet, and three feet of thread, and Darrell ships them to this distributor at $22.50. -Use the information in Table 8-9 to formulate an LP approach to profit maximization.How many decision variables should this problem have?

Which of the following is considered a decision variable in the media selection problem of minimizing interview costs in surveying?

In a production scheduling problem, the inventory at the end of this month is set equal to the inventory at the end of last month + last month's production − sales this month.

Describe the marketing research linear programming application.

The linear programming approach to media selection problems is typically to either maximize the number of ads placed per week or to minimize advertising costs.

Describe the feed mix linear programming application.