MAT 540 Introduction to Management Science Assignment #3 "Julia's Food Booth" By Kotchamon Chongprasert 3454645805 Submit to Prof. Dr.

Emmanuel Sikali 02/24/12

(A) Formulate and solve an L.P. model for this case. The following variables were be used: X1 = Slices of Pizza X2 = Hot Dogs X3 = BBQ Sandwiches The objective is to maximize profit. maximize Z= 0 .75X1+1.05X2+1.35X3 Subject to: 0.75X1+1.05X2+1.35X31,500 (Budget) 24X1+16X2+25X355,296in2 (Oven Space) X1X2+X3 X2X32.0 X1, X2, X30 (B) Evaluate the prospect of borrowing money before the first game.

Following table shows the sensitivity report from excel solver

Food items: Profit per item: Constraints: Budget ($) Oven space (sq. in.) Demand Demand Stock Pizza= Hot Dogs= Barbecue= Profit= 1250 1250 0 2,250. 00

Pizza 0.75

Hot Dogs 1.05

Barbecue 1.35 Availabl e Usage 1,500.0 0 50,000.0 0 1,250.0 0 Left over 0 5296 0 -1250

0.75 24 1 0 slices hot dogs sandwiches

0.45 16 -1 1

0.90 25 -1 -2

1,500 55,296 0 0

Adjustable Cells Cell $B$12 $B$13 $B$14 Constraints Cell $G$9 $G$7 $G$6 $G$8 Name Demand Usage Oven space (sq. in.) Usage Budget ($) Usage Demand Usage Final Value 1,250.0 0 50,000.0 0 1,500.0 0 Shadow Constraint Price R.H. Side 1.50 (0.38 ) 0 55296 1500 0 Allowable Increase 1250 1E+30 158.88 2000 Allowable Decrease 1E+30 5296 1500 3333.33 Name Pizza= Hot Dogs= Barbecue= Final Value 1250 1250 0 Reduced Objective Cost Coefficient 0 0.75 0 1.05 0 1.35 Allowable Increase 1 1E+30 0.37500001 1 Allowable Decrease 1.00 0.27 1E+30

Julia would increase her profit if she borrowed some more money from a friend. The shadow price, or dual value, is $1.50 for each additional dollar that she earns. The upper limit given in the model is $1,658.88, which means that Julia can only borrow $158.88 from her friend, giving her an additional profit of $238.32. (C) Evaluate the prospect of paying a friend $100/game to assist. Yes, I believe Julia should hire her friend for $100 per game. In order for Julia to prepare the hot dogs and barbeque sandwiches needed in a short period of time to make her profit, she needs the additional help. Also, with her borrowing the extra $158.88 from her friend, Julia would be able to pay her friend for the time spent per game helping with the food booth. (D) Analyze the impact of uncertainties on the model. The biggest uncertainty in this model is demand. Although Julia may have a good idea of what people will buy and not buy during the game, the demand can shift from game to game and is not always constant. Hence, if the demand changes then the solution to the linear programming will change, and may affect her ability to make a profit greater than $1000. As with all home games weather plays an important role in the team's ability to perform well, the same is true for food booth sales, for instance the weather may be too hot for pizza and hotdogs, or it may be too cold for food

and the people would rather have hot chocolate. Not only does weather affect the food types sold it will affect the total amount of fans that are willing to attend the games in general. Therefore weather has the greatest affect on the food sales and Julias overall success or failure. For her booth I would recommend adjusting food items based on weather conditions (such as hot chocolate) to offset the losses based on historical data that is affected by weather.