Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 26

In Problem, explain the effect on the optimal solution if the minimum number of claims the firm processes each day increased from 450 to at least 650.
Problem
Universal Claims Processors processes insurance claims for large national insurance companies. Most claim processing is done by a large pool of computer operators, some of whom are permanent and some of whom are temporary. A permanent operator can process 16 claims per day, whereas a temporary operator can process 12 per day, and on average the company processes at least 450 claims each day. The company has 40 computer workstations. A permanent operator generates about 0.5 claim with errors each day, whereas a temporary operator averages about 1.4 defective claims per day. The company wants to limit claims with errors to 25 per day. A permanent operator is paid $64 per day, and a temporary operator is paid $42 per day. The company wants to determine the number of permanent and temporary operators to hire in order to minimize costs.
a. Formulate a linear programming model for this problem.
b. Solve this model by using graphical analysis.