Exam 8: Linear Programming Applications

Media selection problems can be approached with LP from which two perspectives?

Linear programming variable names such as X₁₁, X₁₂, X₁₃, could possibly be used to represent production of a product (X_1j)over several months.

Another name for the transportation problem is the logistics problem.

In formulating the media selection linear programming model, we are unable to take into account the effectiveness of a particular presentation (e.g., the fact that only 5 percent of the people exposed to a radio ad will respond as desired).

The constraints in a transportation problem deal with requirements at each origin and capacities at each destination.

In general, linear programming is unable to solve complex labor planning as the objective function is usually not definable.

The linear programming objective in a portfolio selection formulation is to maximize return.

The following table provides shipping costs from each of two regional warehouses to each of three destinations.The supplies available and the demands are also given in the table. Solve this conundrum in Excel.

When linear programming is used to solve complex labor planning the objective function is usually the minimization of cost.

What is another name for blending problems?

In the linear programming transportation model, the coefficients of the objective function can represent either the cost or the profit from shipping goods along a particular route.

The linear programming truck loading model always results in a practical solution.

Table 8-2 Diamond Jewelers is trying to determine how to advertise in order to maximize their exposure.Their weekly advertising budget is $10,000.They are considering three possible media: tv, newspaper, and radio.Information regarding cost and exposure is given in the table below: Let T = the # of tv ads, N = the # of newspaper ads, and R = the # of radio ads -According to Table 8-2, which describes a media selection problem, what would the objective function be?

The following problem type is such a special case of linear programming that a special algorithm has been developed to solve it.

In the optimal solution to this scenario, purse production falls in between the upper and lower constraints.None of the items with maximum demands are produced to their limit.Which of these statements is valid?

First Securities, Inc., an investment firm, has $380,000 on account.The chief investment officer would like to reinvest the $380,000 in a portfolio that would maximize return on investment while at the same time maintaining a relatively conservative mix of stocks and bonds.The following table shows the investment opportunities and rates of return. The Board of Directors has mandated that at least 60 percent of the investment consist of a combination of municipal and federal bonds, 25 percent Blue Chip Stock, and no more than 15 percent High Tech Stock.Formulate this portfolio selection problem using linear programming.

The linear programming model of the production scheduling process is usually used when we have to schedule the production of multiple products, each of which requires a set of resources not required by the other products, over time.

The linear programming transportation model allows us to solve problems where supply does not equal demand.

The linear programming model of the production mix problem only includes constraints of the less than or equal form.

Since the production mix linear program applications are a special situation, the number of decision variables is limited to two.