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Industrial Engineering 335 Fall 2009

Operations Research - Optimization
Solutions to Midterm Exam 2
Problem 1. (10 points total = 5 parts 2 points)
True or False. Circle the correct answer. No justication required.
a. True False A minimum cost ow problem with integer costs is guaranteed to have an integer
optimal solution.
b. True False Consider the following two linear programs:
[A] max x
1
3x
2
s.t. 2x
1
x
2
_ 3
x
2
_ 1
x
1
_ 0; x
2
_ 0
[B] min 3v
1
v
2
s.t. 2v
1
_ 1
v
1
v
2
_ 3
v
1
_ 0; v
2
_ 0
Suppose . x
1
; x
2
/ is a feasible solution to [A], and . v
1
; v
2
/ is a feasible solution to [B]. Then
x
1
3 x
2
> 3 v
1
v
2
:
c. True False Interior point methods will always nd an optimal basic feasible solution of a linear
program, if an optimal solution exists.
d. True False The Bellman-Ford algorithm can be used to detect the existence of negative dicycles
in a network with arc lengths.
e. True False In a CPM project network for a given project, the length of the longest path from the
start node to the nish node gives the minimum time needed to complete the project.
Solution.
a. False. A minimum cost ow problem with integer net demands and capacities is guaranteed to have
an integer optimal solution. (Lecture 25)
b. False. [A] and [B] form a primal-dual pair. The statement follows by weak duality of linear program-
ming. (Lecture 17)
c. False. Interior point methods may not converge to an optimal BFS if there are multiple optimal
solutions. (Lecture 21)
d. True. See the description of the Bellman-Ford algorithm in Lecture 23.
e. True. The length of the longest path from the start node to the nish node in a CPM project network
gives the minimum time needed to complete the project. (Lecture 24)
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Problem 2. (60 points total)
Note that this problem has parts a through h.
The Simplex Company produces 3 products: A, B, and C.
The prot per unit sold for each of these 3 products is as follows (in dollars):
Product A B C
Price 7 5 3
Each product requires 2 resources: X and Y. The amounts of each resource required to produce each product
are as follows:
Product A Product B Product C
Resource X 4 3 3
Resource Y 2 1 2
The company has 15 units of Resource X available, and 10 units of Resource Y available.
Furthermore, the amount of product C that the company produces must be greater than or equal to twice the
amount of product A it produces.
The company would like to determine production levels of products A, B, and C so that its total prots are
maximized. Assume that all products produced are sold.
a. (12 points) Briey explain why the following linear program solves the Simplex Companys problem:
max 7x
A
5x
B
3x
C
s.t. 4x
A
3x
B
3x
C
_ 15 (1)
2x
A
x
B
2x
C
_ 10 (2)
x
C
2x
A
_ 0 (3)
x
A
; x
B
; x
C
_ 0
Assume that fractional units can be produced and sold. Be sure to explain what the decision variables
represent, the objective function, the main constraints, and the variable-type constraints.
b. (12 points) Write the dual of the linear program described in part a.
Computer output for the linear program in part a is given below. The columns have identical meaning to the
output we discussed in class.
Variable sensitivity analysis:
Optimal Bas Lower Upper Object Reduced Lower Upper
Name Value Sts Bound Bound Coef Object Range Range
--------------------------------------------------------------------------
Variable xA 0.000 NBL 0.000 +infin 7.000 0.200 -infin 7.200
Variable xB 4.000 BAS 0.000 +infin 5.000 0.000 4.833 9.000
Variable xC 3.000 BAS 0.000 +infin 3.000 0.000 2.500 10.000
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Constraint sensitivity analysis:
Optimal RHS Lower Upper
Name Type Dual Coef Slack Range Range
------------------------------------------------------------
Constraint (1) L 1.400 15.000 0.000 5.000 30.000
Constraint (2) L 0.800 10.000 0.000 5.000 30.000
Constraint (3) G 0.000 0.000 3.000 -infin 3.000
c. (6 points) What is the optimal prot (objective function value) of the linear program in part a?
d. (6 points) Give an optimal solution to the dual linear program you wrote in part b.
e. (6 points) Suppose that the company has an opportunity to buy 10 extra units of Resource Y for a total
of $10. Should the company do it? Why?
f. (6 points) Suppose that the company has an opportunity to buy 30 extra units of Resource Y for a total
of $15. Should the company do it? Why?
g. (6 points) Suppose that the unit prot of Product B increases by $3. How does the optimal prot
change?
h. (6 points) Suppose that the unit prot of Product C decreases by $0.40. Give an optimal solution to
the companys production problem under these new circumstances.
Solution.
a. In this LP, x
A
represents the amount of Product A produced, x
B
represents the amount of Product
B produced, and x
C
represents the amount of product C produced. The objective function is the
prot from producing x
A
units of Product A, x
B
units of Product B, and x
C
units of Product C; the
Simplex Companys problem is to maximize prot. Constraint (1) represents the capacity constraint
for Resource X, constraint (2) represents the capacity constraint for Resource Y, and constraint (3)
enforces that the amount of Product C produced is greater than or equal to twice the amount of
Product A produced. The nonnegativity constraints ensure that nonnegative amounts of Products A,
B, and C are produced.
b. The dual of the LP in part a is
min 15v
1
10v
2
s.t. 4v
1
2v
2
2v
3
_ 7
3v
1
v
2
_ 5
3v
1
2v
2
v
3
_ 3
v
1
; v
2
_ 0
v
3
_ 0
where v
1
is the dual variable for constraint (1), v
2
is the dual variable for constraint (2), and v
3
is the
dual variable for constraint (3).
c. The optimal prot is 7.0/ 5.4/ 3.3/ = 29.
d. An optimal solution to the dual LP given in part b is v
1
= 1:4, v
2
= 0:8, v
3
= 0. The optimal value
of the dual LP is 29.
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e. No, the company should not do it. 10 extra units of Resource Y increases the RHS of constraint (2)
from 10 to 20. 20 is in the allowable range for the RHS of constraint (2), according to the constraint
sensitivity analysis table. Therefore, having an extra 10 units of Resource X increases the optimal
prot by $10.0:8/ = $8, which is less than the $10 being offered.
f. Yes, the company should do it. 30 extra units of Resource Y increases the RHS of constraint (2) from
10 to 40. 40 is outside the allowable range for the RHS of constraint (2), according to the constraint
sensitivity table. However, since the LP in part a is a maximization problem, and constraint (2) is
a _-type constraint, having an extra 30 units of Resource Y increases the optimal prot by at least
$0:8.30 10/ = $16, which is greater than the $15 being offered.
g. Increasing the unit prot of Product B by $3 changes the objective function coefcient of x
B
from 5
to 8. 8 is in the allowable range for the objective function coefcient of x
B
according to the variable
sensitivity analysis table. Therefore, the current optimal solution is still valid, and the optimal prot
increases by $4.3/ = $12.
h. Decreasing the unit prot of Product C by $0.40 changes the objective function coefcient of x
C
from
3 to 2.6. 2.6 is in the allowable range for the objective function coefcient of x
C
according to the
variable sensitivity analysis table. Therefore, the current optimal solution is still valid.
Note: One student correctly noted that the primal optimal solution given in the computer output is infeasible
in the LP given in part a! The computer output is actually for a slightly different LP.
Problem 3. (30 points total)
Gomorysport is planning the logistics for its ski jacket production over the next two months. The com-
pany has one production plant, one warehouse, two retail stores, and an outlet store. The production plant
produces exactly 400 jackets per month. The two retail stores have the following demand for the next two
months:
Month 1 Month 2
Retail Store 1 100 300
Retail Store 2 150 200
The outlet store only receives jackets that are left over in the warehouse in month 2. Jackets can be shipped
v from the plant to either retail store, arriving in the same month,
v from the plant to the warehouse, arriving in the same month,
v from the warehouse to either retail store, arriving one month later, or
v from the warehouse to the outlet store, arriving in the same month.
For example, a jacket sent from the plant to the warehouse in month 1 arrives in month 1. A jacket sent from
the warehouse to the outlet store in month 2 arrives in month 2. However, a jacket sent from the warehouse
to either retail store in month 1 arrives in month 2. The cost of shipping one jacket is as follows (in $):
Warehouse Retail 1 Retail 2 Outlet
Plant 2 14 16 -
Warehouse - 6 8 4
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Holding one jacket at the warehouse from one month to the next costs $5. The warehouse has a capacity of
200 jackets. There is no initial inventory at the warehouse. The production plant, retail stores, and outlet
store cannot hold inventory.
Show how to formulate the problem of determining the least costly shipping and inventory plan as a mini-
mum cost ow problem by
v drawing the corresponding network,
v indicating the net demands at each node,
v indicating the cost per unit of ow on each arc,
v indicating the capacity of each arc, and
v describing what the ow on each arc represents.
Your minimum cost ow problem should have total demand equal total supply (total net demand of zero).
Hint: how many jackets end up at the outlet store?
Solution. Gomorysports shipping and inventory problem can be captured by the following minimum cost
ow model.
Plant
.1/
Retail Store 1
.1/
Retail Store 2
.1/
Warehouse
.1/
Plant
.2/
Retail Store 1
.2/
Retail Store 2
.2/
Warehouse
.2/
Outlet Store
.2/
400
100
150
400
300
200
0 0
50
.14; o/
.16; o/
.2; o/
.6; o/
.8; o/
.5; 200/
.14; o/
.16; o/
.2; o/
.4; o/
The arcs labels represent .unit cost; capacity/. The node labels represent net demands.
This problem is very similar to the Super Sleep example in Lecture 27. In this network, we have a node
representing the plant, warehouse, and retail stores in each month. Since the outlet store is only relevant in
month 2, we only have a node for it in month 2. The ow on each arc in this network represents the number
of jackets that are transported between each of the location-month pairs.
Note that time required to send jackets between the warehouse and the retail stores is modeled by the arcs
.Warehouse
.1/
; Retail Store 1
.2/
/ and .Warehouse
.1/
; Retail Store 2
.2/
/. In addition, inventory held in the
warehouse from month 1 to month 2 is captured by the arc .Warehouse
.1/
; Warehouse
.2/
/. Finally, since
over the two month period, the plant produces a total of 400 400 = 800 jackets and the retail stores have
a total demand of 100 150 300 200 = 750 jackets, exactly 50 jackets will be sent to the outlet store
in month 2.
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