Assignment -01

Professor Name: Md Abdul Hannan Mia

Subject: EMIS-517 (Management Science)
Department: Management Information System
MIS

Student Name: Ahammed Akib Samad

Student Id: 6220101009
Batch: Executive 1st
Contact number: 8801957951931

Date of Submission: 18.09.22

1. Sport Vibes makes two different types of cricket ball gloves: a regular model and a catcher’s
model. All Gloves are produced and delivered using the services of cutting and sewing
department, finishing department, and packaging & shipping department. The production time
requirements and the profit contribution per glove by model and the time available by
departments are given in the following table:

Production Time (hours) required by models and

available by departments
Models Cutting & sewing Finishing Packing & Profit $
Shipping
Regular 1 .5 .125 5

Catcher 1.5 .333 .25 8

Available 900 300 100
hours

a. How many decision variables are in the problem?

Answer: 2 (Regular, Catcher)

b. What are the decision variables?

Answer: Regular, Catcher

c. Write down the objective function for this problem

Answer: Maximum profit Z=$5R+$8C

d. How many constraint variables are there in this problem?

Answer: 3

e. What are the constraint variables?

1. Available hours of Cutting and Sewing
2. Available hours of Finishing
3. Available hours of Packing & Shipping

f. Write down all the constraint functions for this problem

a) R, C>=0 (R=Regular, C=Catcher)
b) 1R+1.5C<=900 Cutting and Sewing
c) 0.5R+ 0.333C<=300 Finishing
d) 0.125R+.25C<=100 Packing & Shipping
g. Find the optimal solution using the graphical solution procedure. What is the optimum mix of
gloves of each model should Sport Vibes manufacture?

Point APROXIMA
B TE
X
1 500.15 500
0. 0.3 < 30 X 149.92
C2 5 3 = 0 2 5 150
0. 0.2 < 10 3700.1
C3 1 5 = 0 Z 5 3700

R=500 (Regular), C=150 (Catcher)

h. What is the total profit contribution Kelson can earn with the given production quantities?

Point APROXIMA
B TE
X
1 500.15 500
0. 0.3 < 30 X 149.92
C2 5 3 = 0 2 5 150
0. 0.2 < 10 3700.1
C3 1 5 = 0 Z 5 3700

Total profit contribution Kelson can earn with the given production quantities Z= $3700
i. How many hours of production time will be scheduled in each department?

required by models and available by departments

Model
s Cutting & sewing Finishing Packing & Shipping Profit $

Producti Producti Producti

Quantity Quantity Quantity
on Time on Time on Time
Produced Produced Produced
(hours) (hours) (hours)
Regula
1 500 0.5 500 0.125 500 5
r
Catche
1.5 150 0.333 150 0.25 150 8
r
Availa
ble 900 725 300 299.95 100 100
hours/
production production production
time time time

Production time will be scheduled: 725 hours for Cutting & sewing, 300 hours for Finishing,
100 hours for Packing & Shipping
j. What is the slack time in each department?

required by models and available by departments

Model
Pro
s Cutting & sewing Finishing Packing & Shipping
fit $

Producti Producti Producti

Quantity Quantity Quantity
on Time on Time on Time
Produced Produced Produced
(hours) (hours) (hours)
Regula
1 500 0.5 500 0.125 500 5
r
Catche
1.5 150 0.333 150 0.25 150 8
r
Availab
le 900 725 300 299.95 100 100
hours/
production production production
time time time

Slack time = (900-725) = 175 hours for Cutting & sewing, Finishing & Packing & Shipping has 0
hours of slack time
2. Kariba Investments manages funds of several companies and affluent individuals.
Kariba devices investment strategy for clients based on each client’s needs. For a new client, it
has been authorized to invest up to $1.2 million in two investment funds: (i) an active stock fund
and (ii) a money market fund. Each unit of the active stock costs $50 and provides an annual rate
of return of 10% while each unit of the money market fund costs $100 and provides an annual
rate of return of 4%. The client wants to minimize risk subject to the requirement that the annual
income from the investment be at least $60,000. According to Kariba’s risk measurement
system, each unit invested in the active stock has a risk index of 8, and each unit invested in the
money market fund has a risk index of 3; the higher risk index associated with the stock fund
simply indicates that it is the riskier investment. Kariba’s client also specified that at least
$300,000 be invested in the money market fund.

a. Identify the decision variables. Name the decision variables for mathematical modelling. What
are the parameters of the decision variables? Is it an objective maximization or minimization
problem? Write the objective function.

Answer:
 Decision variables are
S = units purchased in the stock fund
M = units purchased in the money market fund
 Risk index parameter of the decision variables
 Higher risk index associated with the stock fund simply indicates that it is the riskier
investment
 It is an objective minimization problem
 Objective function : Min Z= 8S + 3M

b. What are the constraint variables? Name the constraint variables. Write the constraints
functions
Constraint variables are
1. Invest up to $1.2 million
2. Investment be at least $60,000
3. At least $300,000 be invested in the money market fund.

Constraints functions

50S + 100M <= 1,200,000

5S + 4M >= 60,000
 M >= 3,000
S, M >= 0

c. Determine how many units of each fund Kariba should purchase for the client to minimize the
total risk index for the portfolio

Units of each fund Kariba should purchase

S units purchased in the stock fund= 4000

M units purchased in the money market fund= 10000
d. How much annual income will this investment strategy generate?
Answer:
It will generate = S 10% M4%
S=50x4000x10%=$20000
M=100x10000x4%=$40000
Total annual income (S+M) =$ 60000

e. Suppose the client desires to maximize annual return. How should the funds be invested?

Z= 8S + 3M = $62000
3. Sonny Electronics manufactures two LCD television monitors, identified as model A model B.
Each model has its lowest possible production cost when produced on Sonny’s new production
line. However, the new production line does not have the capacity to handle the total production
of both models. As a result, at least some of the production must be routed to a higher-cost, old
production line. The following table the minimum production requirements for next month, the
production line

Capacities in units per month, and the production cost per unit for each production line:

Let
AN Units of model A produced on the new production line
AO Units of model A produced on the old production line
BN Units of model B produced on the new production line
BO Units of model B produced on the old production line
Sonny’s objective is to determine the minimum cost production plan.
A. Formulate the linear programming model for this problem using the following
Four constraints. Clearly write the objective function and the constraints equations:
Constraint 1: Minimum production for model A
Constraint 2: Minimum production for model B
Constraint 3: Capacity of the new production line
Constraint 4: Capacity of the old production line
Answer:
30 AN +25 BN <= 80000
50AO+40BO<=60000
30AN+50AO>=50000
25BN+40BO>=70000
b. Using Solver solve the problem. Generate answer report and sensitivity report.

c. What is the optimum product mix? what is the total production cost associated with this
solution?
C1 30 20 <= 80000 X1 2571
142.
C4 25 40 >= 70000 X4 9 143

6000 76
C2 50 40 <= 0 X2 9
5000 53
C3 30 50 >= 0 X3 8
 30AN+50AO+25BN+40BO=Z
Z=125062.1

d. Which constraints are binding? Explain.

Answer:
 Minimum production requirement of model A is 50000 unit
 Minimum production requirement of model B is 70000 unit
 New production line capacity 80000 unit
 Old production line capacity 60000 unit

e. The production manager noted that the only constraint with a positive dual value is the
constraint on the capacity of the new production line. The manager’s interpretation of the dual
value was that a one-unit increase in the right-hand side of this constraint would increase the
total production cost by $15 per unit. Do you agree with this interpretation? Would an increase in
capacity for the new production line be desirable? Explain.
Answer: as only constraint is production line capacity and new production line cost is less than
the old production line I will increase the production in the new production line.

f. Would you recommend increasing the capacity of the old production line?
Explain.
Answer: As the production cost in old production line is more I will not recommend to increase
the capacity

g. The production cost for model A on the old production line is $50 per unit. How much would
this cost have to change to make it worthwhile to produce model A on the old production line?
Explain.

h. Suppose that the minimum production requirement for model B is reduced from
70,000 units to 60,000. What effect would this change have on the total production cost?
Explain.

Answer:
30AN+50AO+25BN+40BO=Z
Z=112183.5165