<p>DS 523 Spring 2004 Final exam Name: </p><p>Show all your work</p><p>1. The following linear programming problem has been solved by The Management Scientist. Use the output to answer the questions.</p><p>LINEAR PROGRAMMING PROBLEM</p><p>MAX 25X1+30X2+15X3</p><p>S.T. 1) 4X1+5X2+8X3<1200 2) 9X1+15X2+3X3<1500</p><p>OPTIMAL SOLUTION</p><p>Objective Function Value = 4700.000 </p><p>Variable Value Reduced Costs ------X1 140.000 0.000 X2 0.000 10.000 X3 80.000 0.000 </p><p>Constraint Slack/Surplus Dual Prices ------1 0.000 1.000 2 0.000 2.333 </p><p>OBJECTIVE COEFFICIENT RANGES</p><p>Variable Lower Limit Current Value Upper Limit ------X1 19.286 25.000 45.000 X2 No Lower Limit 30.000 40.000 X3 8.333 15.000 50.000 RIGHT HAND SIDE RANGES</p><p>Constraint Lower Limit Current Value Upper Limit ------1 666.667 1200.000 4000.000 2 450.000 1500.000 2700.000 </p><p>Show all your work.</p><p>1. The following linear programming problem has been solved by the Management Scientist. Use the output to answer the questions</p><p>LINEAR PROGRAMMING PROBLEM</p><p>MAX 25X1+30X2+15X3</p><p>S.T. 1) 4X1+5X2+8X3<1200 2) 9X1+15X2+3X3<1500</p><p>OPTIMAL SOLUTION</p><p>Objective Function Value = 4700.000</p><p>Variable Value Reduced Costs</p><p>X1 140.000 0.000 X2 0.000 10.000 X3 80.000 0.000</p><p>Constraint Slack/Surplus Dual Prices</p><p>1 0.000 1.000 2 0.000 2.333</p><p>OBJECTIVE COEFFICIENT RANGES</p><p>Variable Lower Limit Current Value Upper Limit</p><p>X1 19.286 25.000 45.000 X2 No Lower Limit 30.000 40.000 X3 8.333 15.000 50.000 RIGHT HAND SIDE RANGES</p><p>Constraint Lower Limit Current Value Upper Limit</p><p>1 666.667 1200.000 4000.000 2 450.000 1500.000 2700.000 a. Give the optimal solution.</p><p> x1 = 140</p><p> x2 = 0 Objective Function Value = 4700</p><p> x3 = 80 b. Which constraints are binding?</p><p>4(140) + 5(0) + 8(80) ≤ 1200 1200 ≤ 1200 binding</p><p>9(140) + 15(0) + 3(80) < 1500 1500 <1500 binding c. What is the dual price for the second constraint? What interpretation does this have?</p><p>Dual price 2 = 2.33. A unit increase in the right-hand side of constraint 2 will increase the value of the objective function by 2.33</p><p> d. Over what range can the objective function coefficient of x2 vary before a new solution point becomes optimal?</p><p>As long as c2 < 40 the solution will be unchanged. e. By how much can the amount of resource 2 decrease before the dual price will change?</p><p>1500 – 450 = 1050 2. The optimal solution of the linear programming problem is at the intersection of constraints 1 and 2.</p><p>Max 2x1 + x2 s.t. 4x1 + 1x2 < 400 4x1 + 3x2 < 600</p><p>1x1 + 2x2  300 x1 , x2 > 0</p><p> a. Over what range can the coefficient of x1 vary before the current solution is no longer optimal?</p><p>- 4 ≤ - c1/1 ≤ -4/3 4/3 ≤ c1 ≤ 4</p><p> b. Over what range can the coefficient of x2 vary before the current solution is no longer optimal?</p><p>- 4 ≤ - 2/c2 ≤ - 4/3 4/3 ≤ 2/c2 ≤ 4</p><p>1/4 ≤ c2/2 ≤ 3/4 1/2 ≤ c2 ≤ 3/2 </p><p> c. Compute the dual prices for the three constraints.</p><p>Optimal solution:</p><p>4x1 +x2 = 400 x2 = 400 - 4x</p><p>4x1 + 3x2 = 600 4x1 + 1200 - 12x1 = 600 x1 = 75</p><p> x2 = 400 - 4(75) = 100 Z = 2(75) + 100 = 250</p><p>Dual price for 1st constraint:</p><p>4x1 + x2 = 401 x2 = 401 - 4x1</p><p>4x1 + 3x2 = 600 4x1 + 1203 - 12x1 = 600 x1 = 75.375 </p><p> x2 = 401 - 4(75.375) = 99.5</p><p>Z1 = 2(75.375) + 99.5 = 250.25</p><p>Dual price = 250.25 - 250 = .25 </p><p>Dual price for the 2nd constraint:</p><p>4x1 + x2 = 400 x2 = 400 - 4x1</p><p>4x1 + 3x2 = 601 4x1 + 1200- 12x1 = 601 x1 = 74.875</p><p> x2 = 400 - 299.5 = 100.5</p><p>Z2 = 2(74.875) + 100.5 = 250.25</p><p>Dual price = Z2 - Z = 250.25 - 250 = .25 3. Given the following simplex tableau</p><p> x1 x2 x3 s1 s2 Basis cB 3 4 5 0 0</p><p>X2 4 1/2 1 0 1/2 -1/2 6 X3 5 0 0 1 -1/4 1 3</p><p> zj cj - zj</p><p> a. What variables form the basis?</p><p> x2, x3 b. What are the current values for the decision variables?</p><p> x1 = 0, x2 = 6, x3 = 3 c. What is the current value of the objective function?</p><p>24 + 15 = 39 d. Which variable will be made positive next?</p><p> x1 e. Which variable that is currently positive will become non-basic?</p><p> x2 f. What value will the objective function have next? 51</p><p> x1 x2 x3 s1 s2</p><p>Basis cB 3 4 5 0 0 </p><p> x1 3 1 2 0 1 -1 12 </p><p> x3 5 0 0 1 -1/4 1 3 </p><p> zj 3 6 5 7/4 2 36 + 15 = 51 cj –zj 0 -2 0 -7/4 -2 4. Given the following linear programming problem</p><p>Max 10x1 + 12x2</p><p> s.t. 1x1 + 2x2  40</p><p>5x1 + 8x2  160</p><p>1x1 + 1x2  40</p><p> x1, x2  0</p><p>The final tableau is </p><p> x1 x2 s1 s2 s3 Basis cB 10 12 0 0 0</p><p> x2 12 0 1 -2.5 -.5 0 20 x1 10 1 0 4 1 0 0 s3 0 0 0 -1.5 -.5 1 20</p><p> zj 10 12 10 4 0 240 cj - zj 0 0 -10 -4 0</p><p> a. Find the range of optimality for c2</p><p> x1 x2 s1 s2 s3</p><p>Basis cB 10 c2 0 x2 c2 0 1 -2.5 -.5 0 20 x1 10 1 0 4 1 0 0 s3 0 0 0 -1.5 -.5 1 20</p><p>10 c2 -2.5c2+40 -.5c2+10 0 </p><p>0 0 2.5c2-40 .5c2-10 0</p><p>2.5 c2 - 40 ≤ 0 2.5 c2 ≤ 40</p><p> c2 ≤ 16</p><p>.5 c2 – 10 ≤ 0 c2 ≤ 20 Range of optimality (- ∞, 16)</p><p> b. Find the dual prices.</p><p>Dual price for constraint 1 = -10 constraint 2 = 4 constraint 3 = 0 5. Does the solution shown in this simplex tableau represent a special case? If yes, which one and why?</p><p> x1 x2 x3 s1 s2 a1 Basi c 1 2 5 0 0 -M s B</p><p> a1 -M -3 -1 0 -1 -2 1 4 x3 5 1 1/2 1 0 1/2 0 4 - zj 5+3M 2.5+M 5 M 2.5+2M -M 4M+2 0 cj - zj -4-3M -.5-M 0 -M -2.5-2M 0</p><p>Yes, infeasible solution since artificial variable a2 remains in the final solution at a positive value. 6. Write the linear programming problem for the following network representing a transportation problem.</p><p>5 100 1 </p><p>6 A 250 4 200 2 2 </p><p>3 B 250 150 3 6 9 </p><p>50 4 7 </p><p>Min 5X1A + 6X1B + 4X2A + 2X2B + 3X3A + 6X3B + 9X4A + 7X4B </p><p> s.t. X1A + X1B < 100 X2A + X2B < 200 X3A + X3B < 150 X4A + X4B < 50 X1A + X2A + X3A + X4A = 250 X1B + X2B + X3B + X4B = 250 all Xij > 0 7. Consider the network below. What is the shortest-route path from node 1 to node 7? Give the permanent label for each node and the shortest route with its corresponding distance.</p><p>4 2 4 6 10 8 3 </p><p>4 1 5 7 </p><p>12 7 3 </p><p>9 3 6 </p><p>4 [10,1] 2 4 [14,2] 8 6 10 3 [20,4] 4 1 [0,s] [17,4] 5 7 </p><p>12 7 3 9 [12,1] 3 6 [21,3] </p><p>The shortest route is 1-2-4-5-7 and the distance is 20. 8. Daily demand for packages of five videotapes at a warehouse store is found to be normally distributed with mean 50 and standard deviation 5. When the store orders more tapes, the ordering cost is $42 and the orders take 4 days to arrive. Each pack of tapes costs $7.20 and there is a 24% annual holding cost for inventory. Assume the store is open 360 days a year.</p><p> a. What is the EOQ? b. If the store wants the probability of stocking out to be no more than 5%, and demand each day is independent of the day before, what reorder point should be set? c. How much of your reorder point in part b) is safety stock?</p><p>2DC 2(50)(360)(42) a. Q* = 0   935.41 Ch .24(7.20) b. DDLT is N(200,10) c. Note; this is daily demand for the lead time. Since the lead time is 4 days, then the average will be (4)(50)=200, and standard deviation will be 4(5)  10. r = 200 + 1.645(10) = 216.45 c. 16.45 Multiple Choice Questions Select the best answer.</p><p>1. If a decision variable is not positive in the optimal solution, its reduced cost is a. the amount by which left side of a < constraint is smaller than the right side. b. the amount its objective function value would need to improve before it could become positive. c. zero. d. its dual price. ANSWER: b</p><p>2. The range of feasibility measures a. the right-hand-side values for which the objective function value will not change. b. the right-hand-side values for which the values of the decision variables will not change. c. the right-hand-side values for which the dual prices will not change. d. each of the above is true. ANSWER: c</p><p>3. The amount that the objective function coefficient of a decision variable would have to improve before that variable would have a positive value in the solution is the a. dual price. b. surplus variable. c. reduced cost. d. upper limit. ANSWER: c</p><p>4. The improvement in the value of the objective function per unit increase in a right-hand side is the</p><p> a. sensitivity value. b. dual price. c. constraint coefficient. d. slack value. ANSWER: b 5. A constraint that does not affect the feasible region is a a. non-negativity constraint. b. redundant constraint. c. standard constraint. d. slack constraints. ANSWER: b 6. In a linear programming problem, the objective function and the constraints must be linear functions of the decision variables. a. True b. False ANSWER: True</p><p>7. Which is not required for a problem to be in tableau form? a. Each constraint must be written as an equation. b. Each of the original decision variables must have a coefficient of 1 in one equation and 0 in every other equation. c. There is exactly one basic variable in each constraint. d. The right-hand side of each constraint must be nonnegative. ANSWER: b</p><p>8. A minimization problem with four decision variables, two greater-than-or-equal- to constraints, and one equality constraint will have a. 2 surplus variables, 3 artificial variables, and 3 variables in the basis. b. 4 surplus variables, 2 artificial variables, and 4 variables in the basis. c. 3 surplus variables, 3 artificial variables, and 4 variables in the basis. d. 2 surplus variables, 2 artificial Variables, and 3 variables in the basis. ANSWER: a</p><p>9. For the basic feasible solution to remain optimal</p><p> a. all cj - zj values must remain  0. b. no objective function coefficients are allowed to change. c. the value of the objective function must not change. d. each of the above is true. ANSWER: a</p><p>10. The improvement in the value of the optimal solution per-unit increase in a constraint’s right-hand side is a. the slack value. b. the dual price. c. never negative. d. the 100% rule.</p><p>ANSWER: b</p><p>11. The problem which deals with the distribution of goods from several sources to several destinations is the a. network problem b. transportation problem c. assignment problem d. transshipment problem ANSWER: b 12. In the linear programming formulation of a transportation network a. there is one constraint for each node. b. there is one variable for each arc. c. the sum of variables corresponding to arcs out of an origin node is constrained by the supply at that node. d. All of the above are correct. ANSWER: d</p><p>13. A network uses nodes and arcs to represent geographical locations and the units transferred between them. a. True b. False ANSWER: True</p><p>14. If a transportation problem has four origins and five destinations, the LP formulation of the problem will have nine constraints. a. True b. False ANSWER: True</p><p>15. In a model, x1 > 0 and integer, x2 > 0, and x3 = 0,1. Which solution would not be feasible? a. x1 = 5, x2 = 3, x3 = 0 b. x1 = 4, x2 = .389, x3 = 1 c. x1 = 2, x2 = 3, x3 = .578 d. x1 = 0, x2 = 8, x3 = 0 ANSWER: c</p><p>16. The EOQ model a. determines only how frequently to order. b. considers total cost. c. minimizes both ordering and holding costs. d. All of the alternatives are correct. ANSWER: b 17. Which cost would not be considered part of a holding cost? a. cost of capital b. shipping cost c. insurance cost d. warehouse overhead ANSWER: b</p><p>18. For the inventory model with planned shortages, the optimal order quantity results in a. annual holding cost = annual ordering cost. b. annual holding cost = annual backordering cost. c. annual ordering cost = annual holding cost + annual backordering cost. d. annual ordering cost = annual holding cost – annual backordering cost. ANSWER: c</p><p>19. The definition of service level used in this chapter is a. the percentage of all demand that can be satisfied from inventory. b. the percentage of all order cycles that do not experience a stockout. c. the percentage of demand during the lead-time period that can be satisfied from inventory d. None of the alternatives is correct. ANSWER: b</p>