OR Problems ( All Topics )

First Topic Linear Programming Problems for practice

Q.1 A manufacturing company is engaged in producing three types of products: A,
B and C. The production department produces, each day, components sufficient to
make 50 units of A, 25 units of B and 30 units of C. The management is confronted
with the problem of optimizing the daily production of products in assembly
department where only 100 man hours are available daily to assemble the
products.
The following additional information is available.
Type of product
A
B
C

Profit contribution per Assembly time per

unit of product (Rs)
product (hrs)
12
0.8
20
1.7
45
2.5

The company has a daily order commitment for 20 units of product A and a
total of 15 units of products B and C. Formulate this problem as an LP model so as
to maximize the total profit.
Q.2 A company has two plants, each of which produces and supplies two products
A and B. The plants can each work up to 16 hours a day. In plant 1, it takes three
hours to prepare and pack 1,000 gallons of A and one hour to prepare and pack one
quintal of B. In plant 2, it takes two hours to prepare and pack 1,000 gallons of A
and 1.5 hours to prepare and pack one quintal B. In Plant 1 it costs Rs. 15,000 to
prepare and pack a thousand gallons of A, and RS. 28,000 to prepare and pack a
quintal of B, whereas these costs are Rs 18,000 and Rs 26,000, respectively in
plant 2. The company is obliged to produce daily at least 10 thousand gallons of A
and 8 quintals of B.
Formulate this problem as an LP model to find out as to how the company
should organize its production so that the required amounts of the two products be
obtained at minimum cost.
Q.3 An electronic company is engaged in the production of two components C1
and C2 used in radio sets. Each unit of C1 costs the company Rs 5 in wages and RS
5 in material, while each of C2 costs the company Rs 25 in wages and RS 15 in
material. The company sells both products on one period credit terms, but the

companys labour and material expenses must be paid in cash. The selling price of
C1 is Rs 30 per unit and of C2 it is Rs 70 per unit. Because of the strong monopoly
of the company for these components, it is assumed that the company can sell at
the prevailing prices as many units as it produces. The companys production
capacity is, however, limited by two considerations. First, at the beginning of
period , the company has an initial balance of Rs 4,000 (cash plus bank credit plus
collections from past credit sales). Second, the company requires production of
each C1 , 2 hours of machine time and 2 hours of assembly time, whereas the
production of each C2 requires 2 hours of machine time and 3 hours of assembly
time. Total machine time available is 2000 hrs whereas total assembly time
available 1400 hrs in the given period. Formulate this problem as an LP model so
as to maximize the total profit to the company.
Q.4 A company has two grades of inspectors 1 and 2, who are to be assigned for a
quality control inspection. It is required that at least 2,000 pieces be inspected per 8
hour day. Grade 1 inspector can check pieces at the rate of 40 per hour, with an
accuracy of 97 per cent. Grade 2 inspector checks at the rate of 30 pieces per hour
with an accuracy of 95 per cent.
The wage rate of a Grade 1 inspector is Rs 5 per hour while that of a Grade 2
inspector is Rs 4 per hour. An error made by an inspector costs Rs 3 to the
company. There are only nine Grade 1 inspectors and eleven Grade 2 inspectors
available in the company. The company wishes to assign work to the available
inspectors so as to minimize the total cost of the inspection. Formulate this
problem as an LP model so as to minimize daily inspection cost.

Q.5 An electronic company produces three types of parts for automatic washing
machines. It purchases casting of the parts from a local foundry and then finishes
the part on drilling, shaping and polishing machines.
The selling prices of parts A, B and C, respectively are Rs 8, Rs 10 and Rs
14. All parts made can be sold. Castings for parts A, B and C, respectively cost Rs
5, Rs 6 and Rs 10.
The shop possesses only one of each type of machine. Costs per hour to run
each of the three machines are Rs 20 for drilling, Rs 30 for shaping and RS 30 for
polishing. The capacities (parts per hour) for each part on each machine are shown
in the following table :
Machine
Capacity per hour
Part A
Part B
Part C
Drilling
25
40
25
Shaping
25
20
20
Polishing
40
30
40
The management of the shop wants to know how many parts of each type it
should produce per hour in order to maximize profit for an hours run. Formulate
this problem as an LP model so as to maximize total profit to the company.
Q.6 A pharmaceutical company produces two pharmaceutical products. A and B.
Production of both products requires the same process, I and II. The production of
B results also in a by product C at no extra cost. The product A can be sold at a
profit of Rs 3 per unit and B at a profit of Rs 8 per unit. Some of this by product
can be sold at a unit profit of Rs 2, the remainder has to be destroyed and the
destruction cost is Re 1 per unit. Forecasts show that up to 5 units of C can be sold.
The company gets 3 units of C for each unit of B produced. The manufacturing
times are 3 hours per unit for A on process I and II, respectively, and 4 hours and 5
hours per unit for B on process I and II, respectively. Because the product C results
from producing B, no time is used in producing C. The available times are 18 and
21 hours of process I and II, respectively. Formulate this problem as an LP model
to determine the quantity of A and B which should be produced, keeping C in
mind, to make the highest profit to the company.
Q.7 A tape recorder company manufacturers models A, B and C which have profit
contributions per unit of Rs 15, Rs 40 and RS 60, respectively. The weekly
minimum production requirements are 25 units for model. A, 130 units for model
B and 55 units for model C. Each type of recorder requires a certain amount of

time for the manufacturing of component parts, for assembling and for packing.
Specifically a dozen units of model A require 4 hours for manufacturing, 3 hours
for assembling and 1 hour for packaging. The corresponding figures for a dozen
units of model B are 2.5, 4 and 2 and for a dozen units of model C are 6, 9 and 4.
During the forthcoming week, the company has available 130 hours of
manufacturing, 170 hours of assembling and 52 hours of packaging time.
Formulate this problem as an LP model so as to maximise total profit to the
company.
Q.8 ABC company manufactures three grades of paint Venus, Diana and Aurora.
The plant operates on a three shift basis and the following data is available from
the production records :
Requirment
Grade Venus Diana
Aurora
Availability
of resource
(capacity/month)
Special
0.30
0.15
0.75
600 tonnes
additive
(kg/litre)
Milling
2.00
3.00
5.00
100 machine
(kilolitres per
shifts
machine
shift)
Packing
12.00
12.00
12.00
80 shifts
(kiloliters per
shift)
There are no limitations on other resources. The particulars of sales forecasts and
estimated contribution to overheads and profits are given below.
Venus
100

Maximum
possible sales per
month (kilolitres)
Contribution
4,000
(Rs/kilolitre)

Diana
400

Aurora
600

3,500

2,000

Due to commitments already made, a minimum of 200 kiloliters per month

of Aurora has to be necessarily supplied the next year.
Just as the company was able to finalise the monthly production programme
for the next 12 months, an offer was received from a nearby competitor for hiring
40 machine shifts per month of milling capacity for grinding Dianna paint, that
could be spared for at least a year. However, due to additional handling at the
competitors facility, the contribution from Dianna will get reduced by Re 1 per
litre.
Formulate this problem as an LP model for determining the monthly
production programme to maximise contribution.
Q.9 A garment manufacturer has production line making two styles of shirts. Style 1 require 200
grams of cotton thread, 300 grams of dacron thread, and 300 grams of liner thread. Style II
require 200 grams of cotton thread, 200 grams of dacron thread and 100 gram of liner thread.
The manufacturer make the net profit of Rs. 19.50 on Style I ,Rs. 15.90 on Style II. He has in
hand inventory of 24kg. Of cotton thread ,26kg of dacron thread, and 22 kg of liner thread. His
immediate problem is to determine the production schedule given the current inventory to make
a maximum profit. Formulate the LPP Model

Q.10 A firm makes two types of furniture: Chairs and tables. The contribution of each product
as calculated by accounting department is Rs. 20 Per chair and Rs 30 per table. Both products are
processed on three machines M1,M2 and M3.The time required by each product and total time
available per week on each machine are as follow:
Machine
Chair
Table
Available Hours
M1
3
3
36
M2
5
2
50
M3
2
6
60
How should the manufacturer his production in order to maximize contribution?

Q.11 The ABC manufacturing company can make two products p1 and p2.Each of the product
requires time on a cutting machine and a finishing machine. Relevant data are:

Cutting Hours(Per Unit)

Finishing Hours(Per Unit)
Profit (Rs. Per unit)
Maximum Sales(Unit Per
Week)

P1
2
3
6
310

P2
1
3
4
200

The number of cutting hours available per week is 390 and number of finishing hours
available per week is 810.How much should be produced of each product in order to achieve the
profit for the company?

First Topic Linear Programming Additional Problems for Practice

PROBLEM 1:
XYZ factory manufactures two articles A and B.To manufacture the article A,a certain machine
has to be worked for 1.5 hours and in addition a craftsman has to work for 2 hours.To
manufacture the article B, the machine has to be worked for 2.5 hours and in addition the
craftsman has to work for 1.5 hours in a week the factory can avail of 80 hours of machine time
and 70 hours of craftsman time.The profit on each article A is Rs.50 and that on each article B is
Rs.40. If all the articles produced can be sold away,find how many of each kind should be
produced to earn the maximum profit per week.Formulate the problem as LP model.

PROBLEM 2:
An electric company is engaged in the production of two components C1 and C2 used in T.V.
sets. Each unit of C1 costs the company Rs. 25 in wages and Rs. 25 in material,while each unit
of C2 costs the company Rs. 125 in wages and Rs 75 in material.The company sells both
products on one-period credit terms, but the companys labour and material expenses must be
paid in cash.The selling price of C1 is Rs.150 per unit and of C2 it is Rs 350 per unit.Because of
the strong monopoly of the company for these components ,it is assumed that the company can
sell at the prevailing prices as many units as it produces. The companys production capacity is,
however, limited by two considerations. First, at the beginning of period 1, the company has an
initial balance of Rs. 20,000(cash plus bank credit plus collections from past cedit sales). Second
, the company has available in each period 4,000 hours of machine time and 2,800 hours of
assembly time.The production of each C1 requires 6 hours of machine time and 4 hours of
assembly time,whereas the production of each C2 requires 4 hours of machine time and 6 hours
of assembly time.Formulate this problem as an LP model so as to maximize the total profit of the
company.

PROBLEM 3:
IMC manufactures a variety of computing and computer- related equipment.One such product
is a monitor for use with business computer systems and IMC currently has plans to produce
two models of the same monitor: Model A which is the basic ,low-price monochrome monitor
and Model B which is a more sophisticated and expensive colour graphics monitor.The company
is not actually involved in manufacture directly but rather buys the various component parts
which are required for the two models from outside suppliers.The components are then

assembled by IMC to produce Model A and Model B and each unit produced is then thoroughly
inspected for quality and performance.IMC then sells the two models under its own brand name.
There are, therefore, two basic stages to the production process within the firm- the assembly of
the components and the inspection of the final product. Information about the resources required
to produce the two models has been obtained from the production department and the accounts
department.Model A requires 28 hours of labour to assemble from component parts,while Model
B requires 42 hours.After assembly each computer is then tested in the inspection department to
ensure it is working satisfactorily.Because of the technical complexity of the product- and the
firms desire to maintain good quality the control- the inspection test is time-consuming,with
Model A requiring 12 hours of inspection although Model B requires only 6 hours as more care
and time is taken in the assembly stage . At present the company employs 400 people in the
assembly department,each working a 7-hour day; 100 people are presently employed in the
inspection department but they work an 8 hour day.The company presently operates a 6-day
working week.Current wage rates are Rs. 20 per hour in assembly and Rs. 15 per hour in
inspection.The accounts department has calculated that in terms of the components and parts,
Model A costs Rs.355 and Model B Rs.565 to produce.Currently the two models sel for Rs.
1,295 and Rs. 1,745 respectively.An additional aspect of the problem ,the firm faces , is that each
model requires a particular component- a microchip that forms part of the monitors memory.
The supplier of these chips can provide no more than 600 in any one working week.
FORMULATE a linear programming problem which allows the production manager to
determine how many units of Models A and B should be produced weekly in order to maximize
profits.
PROBLEM 4:
XYZ Electronics company produces three types of parts for automatic washing machine .It
purchases casting of the parts from a local foundry and then furnishes the part of drilling,
shaping and polishing machines.
The selling prices of part A,B and C respectively are Rs.40, Rs.50 and Rs.70
.All parts made can be sold. Castings for part A,B and C respectively cost Rs. 25,Rs. 30 and
Rs.50.
The shop possesses only one of each type of machine. Costs per hour to run
each of the three machines are Rs.100 for drilling,Rs.150 for shaping and Rs. 150 for polishing.
The capacities(parts per hour) for each part on each machine are shown in the adjoining table:

Machine
Drilling
Shaping
Polishing

Part A
25
25
40

Capacity per hour

Part B
40
20
30

Part C
25
20
40

The management of the shop wants to know how many parts of each type it
should produce per hour in order to maximize profit for an hours run. Formulate the problem as
an LP model.

PROBLEM 5:
Ex-servicemen Airport Services Company is considering the purchase of new vehicle for the
transportation between the Delhi airport and hotels in the city.There are three vehicles under
consideration: station wagons, minibuses and large buses.The purchase price would be Rs.
1,45,000 for each station wagon, Rs. 2,50,000 for the minibus and Rs. 4,00,000 for the large bus.
The Board of Directors has authorized a maximum amount of Rs. 50,00,000 for these purchases.
Because the heavy air travel, the new vehicles would be utilized at maximum capacity regardless
of the type of vehicles purchased. The expected net annual profit would be Rs. 15,000 for the
station wagon ,Rs. 35,000 for the minibus and Rs. 45,000 for the large bus. The company has
hired 30 new drivers for the new vehicles. They are qualified drivers for all three types of
vehicles. The maintenance department has the capacity to handle an additional 80 wagon
stations. A minibus is equivalent of 5/3 wagon stations and each large bus is equivalent to 2
station wagons in terms of their use of the maintenance department. Determine the optimal
number of vehicles to be purchased in order to maximize profit. FORMULATE the problem as
LP model.

PROBLEM 6:
Vitamins V and W are found in two different foods F1 and F2.One unit of food F1 contains 2
units of vitamin V and 5 units of vitamin W. One unit of food F2 contains 4 units of vitamin V
and 2 units of vitamin W. One unit of food F1 and F2 cost Rs. 30 and 25 respectively. The
minimum daily requirements(for a person) of vitamin V and W is 40 and 50 units respectively.
Assuming that anything in excess of daily minimum daily requirement of vitamin V and W is not
harmful, find out the optimal mixture of food F1 and F2 at the minimum cost which meets the
daily minimum requirement of vitamins V and W. FORMULATE this as a Linear Programming
model.

PROBLEM :7
A company is making two products A and B .T he cost of producing one unit of A and B is Rs
60 and Rs 80 respectively .As per the agreement, the company has to supply at least 200 units of
product B to its regular customers. One unit of product A requires one machine hour whereas
product B has machine hours available abundantly within the company.Total machine hours
available for product A are 400 hours. One unit each of product A and B requires one labour
hour each and total of 500 labour hours are available. The company wants to minimize the cost
of production b satisfying the given requirements. FORMULATE the problem as a linear
programming problem.

PROBLEM :8
Frontier bakery has received order from a company M/s Bodhraj Ltd., for the supply of high
protein biscuits. The order will require 1000 Kg. of biscuits mix which is made from 4
ingredients R,S T and U which cost Rs.16,Rs. 4,Rs. 6 and Rs.2per Kg. respectively. The batch
must contain a minimum of 400 Kilos of protein, 250 kilos of fat, 300 kilos of carbohydrates and
50 Kilos of sugar. The ingredients contain the following percentage by weight:

Ingredients
R
S
T
U

Protein
50%
10%
30%
0%

Fat
30%
15%
5%
5%

Carbohydrates
15%
50%
30%
5%

Sugar
5%
15%
30%
30%

Filler
0%
10%
5%
60%

Only 150 kilos of S and 200 kilos of T are immediately available.

Draft a suitable LP model.

PROBLEM :9
A 24-hour supermarket has the following minimal requirements for security officers:
Table 1: STAFFING REQUIREMENTS
TIME OF DAY
MINIMUM NUMBER
OF CASHIERS REQUIRED
MIDNIGHT 4AM
4 AM 8 AM
8 AM - NOON
NOON 4PM
4 PM 8 PM
8 PM - MIDNGHT

7
20
14
20
10
5

TABLE 2: SHIFT SCHEDULE

SHIFT STARTING
ENDING
TIME
TIME
1
MIDNIGHT
8AM
2
4AM
NOON
3
8AM
4PM
4
NOON
8PM
5
4PM
MIDNIGHT
6
8PM
4AM

Shift 1 follows immediately after shift 6. An officer works 8 consecutive hours, starting at the
beginning of one of the six periods. The personnel manager wants to determine how many
officers should work each shift in order to minimize the total number of officers employed while
still satisfying the staffing requirement.
Formulate the problem as a linear programming problem.

PROBLEM :10
A media specialist plans to allocate advertising expenditure in three media whose unit costs of a
message are Rs. 1500; Rs.1250 and Rs.1000 respectively. The total advertising budget available
for the year is Rs. 50000.The first medium is a monthly magazine and it is desired to advertise
not more than once in one issue. At least five advertisements should appear in the second
medium and the no of advertisement in the third medium should strictly lie between 6 and
10.The effective audience for unit advertisement in the three media is given below:
Medium:
1
2
3
Expected effective audience:
50,000
40,000
25,000
Formulate a linear programming problem to find the optimal allocation of advertisement in three
media that would maximize the total effective audience.

PROBLEM :11
A person is interested in investing Rs.5,00,000 in a mix of investments. The
investment choices and expected rates of return on each one of them are :Investment
Mutual Fund A
Mutual Fund B
Money Market Fund
Government Bonds
Share Y
Share X

Projected Rate of Returns

0.12
0.09
0.08
0.085
0.16
0.18

The investor wants at least 35 per cent of his investment in government bonds.
Because of the higher perceived risk of the two shares, he has specified that the combined
investment in these not to exceed Rs.80,000. The investor has also specified that atleast 20 per
cent of investment should be in the money market fund and that the amount of money invested in
share should not exceed the amount invested in mutual fund. His final investment condition is
that the amount invested in mutual fund A should be no more than the amount invested in mutual
fund B. the problem is to decide the amount of money to invest in each alternative so as to obtain
the highest annual total return. FORMULATE the above as linear programming problem.

PROBLEM :12

In a chemical industry two products A and B are made involving two operations. The production
of B also results in a by-product C. the product A can be sold at a profit of Rs. 3 per unit and B at
a profit of Rs. 8 per unit. The by-product C has a profit of Rs. 2 per unit. Forecasts show that
upto 5 units of C can be sold. The company gets 3 units of C for each unit of B produced. The
manufacturing times are 3 hrs per unit for A on each of the operation one and two and 4 hrs and
5 hrs per unit for B on operations one and two respectively. Because the product C results from
producing B, no time is used in producing C. the available times are 18 hrs and 21 hrs of
operation one and two respectively. The company desires to know that how much A and B
should be produced keeping C in mind to make the highest profit. FORMULATE LP model for
this problem.
PROBLEM :13

A public limited company is planning its capital structure that will consist of equity capital, 15 %
debentures and term-loans. Debentures are to be repaid on face value, interest rate is payable half
yearly and annualized cost of issue of debenture is %. Interest on term-loan is 18% p.a. to be
paid annually while the cost of equity is estimated as 20%. It is decided not to have outsiders
funds not more than 2 times of equity fund; also the amount of term-loan must be at least 50% of
the debenture amount. FORMULATE a suitable LP model so as to minimize average cost of
capital of the company.
PROBLEM.14

A mutual fund has cash resources of Rs. 200 million for investment in diversified portfolio.
Table below shows the opportunities available, their estimated annual yields, risk factors and
term period details.
FORMULATE a suitable LP model to find the optimal portfolio that will maximize returns,
considering the following policy guidelines:
Investment type
Bank Deposits
Treasury notes
Corporate Deposits
Blue-chip Stocks
Speculative Stocks
Real Estate

Annual Yield (%)

9.5
8.5
12.0
15.0
32.5
35.0

Risk factors
0.02
0.01
0.08
0.25
0.45
0.40

Time period (years)

6
4
3
5
3
10

All the funds available may be invested

Weighted average period of at least 5 years as planning horizon.
Weighted average risk factor not to exceed 0.20.
Investment in real estate and speculative stocks to be not more than 25 % of the money invested
in total.

PROBLEM.15

A company has the following independent projects available:

Project cash flows (Rs.000)
Year
A
B
C
D
E
0
(100)
(40)
1
(50)
(60)
(60)
(120)
2
(10)
(70)
(40)
50
100
3
70
10
(80)
10
(10)
Cash flows extend beyond year 3 but all are cash inflows for each project
NPV
20
15
10
30
10
(Rs.000)

F
(30)
(10)
20
10
5

New capital for these projects is limited to :

Year 0 Rs. 1,20,000
Year 1 Rs. 2,00,000
Year 2 Nil
Year 3 Nil
Cash generated from these investments can be re-invested in other projects in the same year.
EXPRESS the above problem in LP format, assuming the objective of the company is to
maximize NPV and the projects are divisible.
PROBLEM :16

A ship has three cargo loads--- Forward, after and center. The capacity limits are :

Forward
Center
After

Weight (tons)
2,000
3,000
1,500

Volume (in cubic Ft. )

1,00,000
1,35,000
30,000

The following cargos are offered. The shipowner may accept all or any part of each commodity.
Commodity
A
B
C

Weight (tons)
6,000
4,000
2,000

Volume (in cubic Ft. )

60
50
25

Profit per tonne ( Rs.)

150
200
125

In order to preserve the trim of the ship, the weight in each load must be proportional to the
capacity in tones. The cargo is to be distributed so as to maximize the profit. FORMULATE the
problem as LP model.

PROBLEM :17
The PQR stone company sells stones secure from any of the three adjacent quarries. The stone
sold by the company must conform to the following specifications:
Material X equal to 30%
Material Y equal to or less than 40%
Material Z between 30% and 40%
Stone from quarry A costs Rs. 100 per tonne and has the following properties:
Material X 20%
Material Y 60%
Material Z 20%
Stone from quarry B costs Rs. 120 per tonne and has the following properties:
Material X 40%
Material Y 30%
Material Z 30%
Stone from quarry C costs Rs. 150 per tonne and has the following properties:
Material X 10%
Material Y 40%
Material Z 50%
From what quarries should PQR stone company secure rocks in order to minimize cost per tonne
of rocks?
PROBLEM 18
Use Simplex Method to solve the following L.P. Problem
Max.Z = 6x1 + 8x2
Subject to : 30x1 + 20x2 <300
5x1 + 10x2 < 110
x1 + x2 >0
PROBLEM 19
Use simplex method to solve the following L P problem :
Max.Z. = 6 x1 + 8 x2
Subject to Constraints :
2 x1 + 3 x2 < 16
4 x1 + 2 x2 < 16

PROBLEM 20
Use simplex method to solve the following LP Problem
Max Z = 4 x1 + 5x2+8x3
Subject to : X1 + X2 + X3 + < 100
3 x1 + 2x2 + 4x3 < 500
x1, x2, x3, >0

Second Topic Transportation Model Problems for practice

Q.1 A dairy firm has their plants located in a state. The daily milk production at each plant is
as follows:
PLANT
MILK SUPPLY

1
6

2
1

3
10

Each day, the firm must fulfill the needs of its four distribution centers. Minimum
requirement at each center is as follows:
CENTER
MILK
SUPPLY

1
7

2
5

3
3

4
2

Cost in the hundreds of rupees of shipping one million litre from each plant to each
distribution center is given in the following table:
Distribution center
D1
P1
2
P2
1
P3
5

D2
3
0
8

D3
11
6
15

Find initial basic feasible solution for given problem by using:

(a)North West corner rule
(b) Least cost method and
(c) Vogels approximation method
If the objective is to minimize the total transportation cost.

D4
7
1
9

Q.2 A Company has factories at F1, F2, and F3 which supply to warehouses at W1, W2, and W3.
Weekly factory capacities are 200,160,and 90 units, respectively. Weekly warehouse
requirement are 180,120and 150 units respectively. Unit shipping costs (in rupees) are as
follows:
Ware house
W1
W2
W3
SUPPLY
F1
16
20
12
200
F2
14
8
18
160
F3
26
24
16
90
DEMAND
180
120
150
450
Determined the optimal distribution for this company to minimize total shipping cost.

Second Topic Transportation Model Additional Problems for Practice

Q.1 A company has four manufacturing plants and five warehouses. Each plant manufactures
the same product which is sold at different prices in each warehouse area. The cost of
manufacturing and cost of raw material are different in each plant to various factors. The
capacities of the plants are also different. The data are given in the following table:
PLANT ITEM
Manufacturing cost (RS) per unit
Raw material cost (RS)per unit
Capacity per unit time

1
12
08
100

2
10
07
200

3
08
07
120

4
08
05
80

The company has five warehouses. The sales prices, transportation costs and demands are
given in the following table:
ware house transportation cost per unit

A
B
C
D
E

4
8
2
10
2

7
9
7
7
5

4
7
6
5
8

3
8
10
8
9

sale price
demand
per unit(Rs.)

30
32
28
34
30

80
120
150
70
90

(a) Formulate this problem as a transportation problem to maximize profit.

(b) Find the solution using VAM method.

Q.2 Obtain an optimal solution to the transportation problem given below by UV method. Use
VAM method for obtaining initial feasible solution

S1
S2
S3
DEMAND

D1
19
70
40
5

D2
30
30
8
8

D3
50
40
70
7

D4
10
60
20
14

CAPACITY
7
9
18
34

Q.3 Consider a firm having 2 factories. The firm is to ship its products from the factories to
three- retail stores. The number of units available at factories X and Y are 200 and 300,
respectively while those demanded at retail stores A ,B and C are 100,150 and 250,
respectively. Rather than shipping directly from factories to retail stores, it is asked to
investigate the possibility of Trans- shipment. The transportation cost (in Rupees) per unit is
given in the table .
FACTORY

RETAIL STORE

X
Y

0
6

8
0

7
11

8
9

9
10

Retail store A
B
C

7
1
8

2
5
9

0
1
7

5
0
8

1
4
0

Factory

Find out the optimal shipping schedule.

Q.4 ABC limited has three production shops supplying a product to five warehouses. The coat of
production varies from shop to shop and cost of transportation from one shop to a warehouse
also varies. Each shop has a specific production capacity and each warehouse has certain amount
of requirement. The cost of transportation are given below:

A
B
C
DEMAN
D

I
6
5
3
60

II
4
6
4
80

Ware house
III
4
7
6
85

IV
7
4
3
105

V
5
8
4
70

SUPPLY
100
125
175
400

The Cost Of Manufacturing The Product At Different Production Shop Is

shop
A
B
C

Variable cost
14
16
15

Fixed cost
7000
4000
5000

Find the optimum quantity to be supplied from each shop to different warehouses at minimum
total cost.

Third Topic Assignment Model Problems for practice

Q.1
A job production unit has four jobs A,B,C,D which can be manufactured on each
of the four machines P,Q,R and S. The processing cost of each job on each machine is given in
the table below:
Jobs

Machine
P

A
B
C
D

31
25
19
38

Q
R
Processing cost (Rs.)
25
33
24
23
21
23
36
34

S
29
21
24
40

To achieve minimum processing cost, which job will you process on which machine?
Q.2 A workshop has four machines and four tasks for completion. Each of the machines can
perform each of four tasks. Time taken at each of the machines to complete each task is given in
the matrix below:
How should the tasks be assigned to machines requirement of machine hours?
Tasks

Machine
A

I
II
III
IV

51
32
37
55

B
C
Processing times (Hrs.)
77
49
34
59
44
70
55
58

D
55
68
54
55

Q.3 A pharmaceutical company has four branches, one each at city A, B, C and D. A branch
manager is to be appointed one at each city, out of four candidates P, Q, R and S. The monthly
business depends upon the city and the effectiveness of the branch manager in that city.
Branch
manager
P
Q
R
S

A
11
13
12
16

City
B
C
Monthly business (Rs. lakhs)
11
9
16
11
17
13
14
16

D
9
10
8
12

Which manager should be appointed at which city so as to get maximum total monthly business?

Q.4 Darda oil mills have four plants each of which can manufacture anyone of the four
products. The manufacturing costs differ from plant to plant and so do the sales revenues. The
revenue and cost details are as given below:

Sales revenue (Rs. Lakhs)

Plants
A
B
C
D

Products
I
70
80
75
78

II
88
90
87
85

III
69
71
73
74

IV
82
94
80
89

III
55
55
59
58

IV
71
79
68
76

Manufacturing cost (Rs. Lakhs)

Plants
A
B
C
D

Products
I
59
65
62
65

II
70
73
72
74

Suggest which plant should produce which product to maximize profit?

Q.5 A company has four territories open, and four salesman available for an assignment. The
territories are not equally rich in its sales potential. It is estimated that, a typical salesman,
operating in each territory would bring in the following annual sales.
Territory

II

III

IV

Annual
Sales(Rs.)

126000

105000

84000

63000

The four salesmen also differ in their ability. It is estimated that, working under the same
conditions, their yearly sales would be proportionately as follows:
Salesman

Proportion

Assign the salesmen to each territory if the criterion is maximum expected total sales.

Third Topic Assignment Model Additional Problems for Practice

Q.1 A departmental head has four subordinates and four tasks for completion. The subordinates
differ in their capabilities and tasks differ in their work contents and intrinsic difficulties. His
estimate of time for each subordinate and each task is given in matrix below:
Tasks

Subordinates
II
III
Processing cost (Rs.)
25
26
27
23
18
17
25
23

I
A
B
C
D

17
28
20
28

IV
20
25
14
19

How should the tasks be assigned to minimize requirements of man-hours?

Q.2 A departmental head has three subordinates and four tasks for completion. The employees
differ in their capabilities and the tasks differ in their work contents. With the performance
matrix given below, which three of four tasks should be assigned to subordinates?

Tasks

A
B
C
D

Subordinates
I
9
8
20
21

II

III
12
13
12
15

11
17
13
17

Q.3 A gear manufacturer requires 2000 numbers per month of each of the six types of gears. Six
hobbing machines are available to process these gears. The gears differ in their work contentsgear with, number of teeth, module etc-and machine differ in their capabilities-speeds, feeds and
ability to take depth of cut. The production control department has prepared the machine wise
cost matrix as shown in the matrix below:
Gear
I
II
III
IV
V
VI

M1
15
20
19
30
6
13

Hobbing machines
M3
M4
13
10
12
14
15
42
38
10
12
16
14

M2
18
16
16
8
12

M5
18
19
35
9
15

M6
14
15
20
36
10
18

Gear I can be assigned to machine M5 because of steep helix angle. Gear III can not be assigned
to machine M4 as it is not within the capacity of this machine. And gear IV can not be loaded on
machine M2 because of limitations of process capability of the machine. Find the optimum
assignment schedule.
Q.4 A salesman has to visit five cities. He wishes to start from a particular city, visit each city
once and return to starting city. The cost of going from a city to another in Rs. is given below:
From
City
A
B
C
D
E

To city
A
0
16
18
21
11

Determine the least cost route.

B
12
0
17
14
13

C
15
13
0
18
12

D
17
18
14
0
18

E
11
12
17
16
0

Fourth Topic Decision Analysis Problems for practice

Q.1 A departmental store purchases Christmas trees, which can be ordered
only in lots of 100. Each tree selling price Rs. 40 each. Unsold trees, however,
have no salvage value. The purchase price of the trees is Rs. 25 each The
probability distribution obtained from analysis of past data is given below:
Trees sold
100
200
300
400
500

probabilities
0.20
0.35
0.25
0.15
0.05

(a) Setup a payoff table

(b) How much quantity should the departmental store buy to maximize its
profit?
Q.2 A manufacturer of sewing machines is faced with the problem of selecting one of
the two models for manufacturing. The profit depends on the market acceptability
of the model which are present is uncertain but is had been broadly classified into
four categories: excellent, good, fair and poor. ( Take alpha = 0.6)
The profits or losses (losses are indicated by negative sign) expected by the management
from the different levels of market acceptability of the models are as follows:
__________________________________________________________________
Market
Profit (Rs.) for the model for the
Indicated market acceptability
__________________________
Probability
Deluxe
Janata
__________________________________________________________________
Excellent
0.2
60,000
78,000
Good
0.3
28,000
38,000
Fair
0.4
18,000
8,000
Poor
0.1
8,000
-12,000
__________________________________________________________________
Which product should the company select from the standpoint of maximin (gain)
criterion?

Q.3 A company is making a large boiler installation. A certain automatic monitoring unit is
critical for the operation of the whole system. At the time of original order, the spares for this
unit can be purchased for Rs. 2,000 per unit. The probability distribution for the failure of the
unit during the life time of installation is given as :
__________________________________________________________
_______Failure_________________________Probability____________
0
0.35
1
0.25
2
0.20
3
0.15
4
0.05
___________________________________________________________
If a spare is needed and is not available, the total cost of idle time and replacement cost
will be Rs. 15,000. Unused spares have no salvage value.
Determine the optimal no. of spares to be ordered.
Q.4 A newspaper boy is thinking of selling a special one time edition of a sports magazine to his
regular newspaper customers. Based on his knowledge of his customers, he believes that he can
sell between 9 to 12

copies.

The magazines can be purchased at Rs. 8 each and can be sold for Rs. 12 each.
Magazine that are not sold can be returned to the publisher for a refund of 50%.
(a)

Construct the decision matrix for the above inventory problem

indicating possible monetary consequences.

(b)

Determine the best decision from the stand point of

(i) Maximin criteria

(ii) Maximax criteria

(iii)Hurwiez a-criterion assuming a=0.40

(iv) Minimax regret criteria (v) Laplace criteria

Q.5 Agent Corner, an authorized dealer in domestic appliances find that the cost of
holding refrigerator in stock for a week is Rs. 50.
Customers who cannot get a new refrigerator immediately wanted to go to another dealer
for which expected profit is Rs. 350 per customer.
Probability distribution of demand is as follows:
No. of refrigerator: 0
1
2
3
Probability
: 0.05 0.10 0.20 0.30

4
5
6
0.20 0.10 0.05

Assuming that there is no time lag between ordering and delivery, how many
refrigerators should we order per week?

Q.6 A departmental store buys Christmas tree at a landing cost of Rs 25 each and sells them
at an average of Rs 40. Any tree left over after the selling season has no resale value.
The productivity distribution of sale of trees derived from analysis of pas t sales data is
under:
Tree (sale)
Probability
100
200
300
400
500
600
700

0.10
0.15
0.35
0.20
0.10
0.05
0.05

a) How many trees should be department store buy to maximize its profit?
b) If trees left after the selling season cost Rs 5 each to remove ,does it affect the
inventory decision?

Q.7 A Ship building company has launched a program for the construction of new class of
ships. Certain spare units like prime over, each costing 200000 have to be purchased. If these
units are not available when needed, a serious loss is incurred which is in order of Rs 10000000
each instance requirements of spares with the corresponding probabilities are given below.
Nos of spares:

Probability of
0.876 0.062 0.041 0.015 0.005
0.001
requirement
How many spares should the company buy in order to optimize inventory decision?

Fourth Topic Decision Analysis Additional Problems for Practice

Q.1 A perishable item is ordered only once each demand period. Acquisition cost is $3,
selling price is $5, and salvage value is $1.50. What is optimal order quantity? Given:
Demand
100
110
120
130
140
150

Probability
0.1
0.2
0.2
0.3
0.1
0.1

Q.2 A newspaper boy buys papers for Rs 1.30 each and sells them for Rs 1.40 each. He
cannot return unsold newspapers. Daily demand has the following distribution.

No. of customers:

23

24

25

26

27

28

30

31

32

Probability:

0.01

0.03

0.06

0.10

0.20

0.25

0.10

0.05

0.05

If each day's demand is independent of the previous days, how many papers he should order
each day?