Practice Test # 1 TRLOG 460 Spring, 2011

1. The director of corporate training at Dobson Inc. believes that her department will require the following numbers of laptop computers during the next six months: July, 54; August, 30; September, 42; October, 54; November, 60; and December, 30. Each laptop computer can be leased for a period of one, two, or three months at the following rates: 1month rate, $250; 2-month rate, $400; 3-month rate, $500. Using the shell provided in the worksheet titled Problem 2, formulate and solve a linear programming problem to help this company determine how to minimize the cost of renting the required numbers of computers. Assume that if a laptop is rented for a period of time extending beyond December, the cost of the lease is prorated. For example, if a laptop is rented for three months at the beginning of November, then a rental fee of (2/3)$500 = $333.33 is assessed. 2. Northstar Oil produces two types of gasoline: regular and premium. Each type of gasoline is produced by blending two types of crude oil: crude oil A and crude oil B. The selling price per barrel of each gasoline and the purchase price of each type of crude oil are provided in the Problem 3 worksheet. Northstar can purchase no more than 7500 barrels of each type of crude oil daily. The two types of gasoline differ in their octane rating and sulfur content. The crude oil blended to produce regular gas must have an average octane rating of at least 87 and contain at most 2% sulfur. The crude oil blended to produce premium gas must have an average octane rating of at least 89 and contain at most 1% sulfur. The octane rating and the sulfur content of the two types of crude oil are also given in the problem 3 worksheet. It costs $10 to transform one barrel of oil into one barrel of gasoline, and Northstars refinery can produce up to 13,500 barrels of gasoline daily. Northstars customers require 7000 barrels of regular gasoline and 3500 barrels of premium gasoline each day. The company believes that it has the production capacity to meet these daily demands for its two products. Finally, Northstar also has the option of advertising to stimulate demand for its products. In particular, each dollar spent daily in advertising a particular type of gasoline increases the daily demand for that type of gas by 20 barrels. Using the template provided in the Problem 3 worksheet find the solution that yields the maximum profit.

3. A paper recycling company converts newspaper, mixed paper, white office paper, and cardboard into pulp for newsprint, packaging paper, and print stock quality paper. The following table summarizes the yield for each kind of paper recovered from each ton of recycled material:

Newspaper Mixed Paper White Office Paper Cardboard

Newsprint 85% 90% 90% 80%

RECYCLING YIELD Packaging Print Stock 80% 80% 70% 85% 80% 70% -

For instance, a ton of newspaper can be recycled using a technique that yields .85 tons of newsprint pulp. Alternatively, a ton of newspaper can be recycled using a technique that yields .8 tons of packaging paper. Similarly, a ton of cardboard can be recycled to yield .8 tons of newsprint or .7 tons of packaging paper pulp. Note that newspaper and cardboard cannot be converted to print stock pulp using techniques available to the recycler. The cost of processing each ton of material into the various types of pulp is summarized in the table below along with the amount of each of the four raw materials that can be purchased and their costs:
PROCESSING COSTS PER TON Newsprint Packaging Print Stock $6.50 $11.00 $9.75 $12.25 $9.50 $4.75 $7.75 $8.50 $7.50 $8.50 PURCHASE COST PER TON $15 $16 $19 $17 TONS AVAILABLE 600 500 300 400

Newspaper Mixed Paper White Office Paper Cardboard

Using the worksheet titled Problem 4, find the least cost way of producing 500 tons of newsprint pulp, 600 tons of packaging paper pulp, and 300 tons of print stock quality pulp. 4. Using the data in the sheet labeled Problem 4, use Winters multiplicative forecasting method to find the forecast and a 95% confidence interval for Jan and February 1997.