1

Profit
Constraints
a.
b.

Maximum
Gains

F
40000

C
20000

M
40000

0.08

0.09

0.07

(F+C+M)*0.4>=F
M>=2*C

7800

100000

100000

Toy-v1
10
2

Toy-v2
12
3

Toy-v3
15
4

Profits
Min prod.

1
10

5
10

6
10

Actual prod.

10

19

10

Maximum
Gains

165

F&P
Plastic

Contraint 1.
DV

478
117

Constraint 2
480
200

DV

Product
Labour
Raw Material
Unit price
Variable cost
Demand

1
6
3.2
12.5
6.5
960

2
5
2.6
11
5.7
928

3
4
1.5
9
3.6
1041

4
3
0.8
7
2.8
977

5
2.5
0.7
6
2.2
1084

6
1.5
0.3
3
1.2
1055

Profit / additional
unit

5.3

5.4

4.2

3.8

1.8

Qty Produced

594

1084

Profit

6624.8

4500
1237

Constraints
4500
1600

Decision variable
Mid size cars X1,
Compact cars X2.

Solution:

Mid

Compact

50

40

8000

8000

profit

500

400

total profit

41000

DV
Cost

Actual
720000

Available
720000

DV

Type of Loan or
Security
Loan Sanctioned

Constraints

Annual Rate of
Return (%)

Annual Returns

Home mortgage Home mortgage

(first)
(second)
36000000
18000000
A1
A2
e. > 2*A2
d. > 0.6*Sum(A)

6%
0.06
6740000

8%
0.08

Commercial Loan Automobile Loan

13500000
5500000
A3
A4
g. < A4+ A5
h. < 0.5(A1+A2)

11%
0.11

9%
0.09

Home
Improvement
Loan
8000000
A5
c. < 8000000
f. > 0.4* A1

Risk-free
Securities
9000000
A6
b. > 0.1*Sum(A)

10%
0.1

4%
0.04

Available
90000000 90000000
Sum(A)
a.90 million

Contraint g is optional and if not considered as mandotory the returns change to following values
g)
Automobile loans and home improvement loans together may exceed the commercial loans.

DV

Type of Loan or
Security
Loan Sanctioned

Constraints

Annual Rate of
Return (%)

Annual Returns
a.
b.
c.
d.

Home mortgage Home mortgage

(first)
(second)
36000000
18000000
A1
A2
e. > 2*A2
d. > 0.6*Sum(A)

6%
0.06
6930000

Total available funds of 90 million

Risk free Securites at least 10%
Home improvement loans should not increase 8000000

8%
0.08

hange to following values

eed the commercial loans.

Commercial Loan Automobile Loan

27000000
0
A3
A4
g. < A4+ A5
h. < 0.5(A1+A2)

11%
0.11

9%
0.09

Home
Improvement
Loan
0
A5
c. < 8000000
f. > 0.4* A1

Risk-free
Securities
9000000
A6
b. > 0.1*Sum(A)

10%
0.1

4%
0.04

Available
90000000 90000000
Sum(A)
a.90 million

LA
ATLANTA
NEW YORK CITY

LA
ATLANTA
NEW YORK CITY

Total Distrubution Cost

EAST
5
3.2
2.5

MIDWEST
3.5
2.6
3.1

SOUTH
4.2
1.8
3.3

WEST
2.2
4.8
5.4

9000

6000

6000

13000

EAST
0
0
9000

MIDWEST
0
3000
3000

SOUTH
0
6000
0

WEST
10000
3000
0

9000

6000

6000

13000

86800

Used
10000
12000
12000

CAPACITY
10000
12000
14000

Feed I

Wheat
Alfalfa

SP
Profit

Feed II

1000
250

0
550

1250

550

1.5

1.3

1770

1000
800

Max. Qty.
1000
800

CP
0.5
0.4

From/To
Plant I
Plant II
Plant III

From/To
Plant I
Plant II
Plant III

109500

Warehouse I
2.5
4.5
2

Warehouse II
3.5
1.5
3.2

Warehouse III
4
2
3

15000

12000

18000

Warehouse I
7000
0
8000

Warehouse II
2000
10000
0

Warehouse III
0
0
18000

15000

12000

18000

9000
10000
26000

16000
10000
26000

From/To
Plant I
Plant II
Plant III

From/To
Plant I
Plant II
Plant III

109900

Warehouse I
2.5
4.5
2

Warehouse II
3.5
1.5
3.2

Warehouse III
4
2
3

15000

12000

18000

Warehouse I
9000
0
6000

Warehouse II
0
10000
2000

Warehouse III
0
0
18000

15000

12000

18000

9000
10000
26000

16000
10000
26000

DV

Weight
CP
SP
Profit
Minimum

Bar 1
3.5
0.22
0.35
0.13
1000

Bar 2
6
0.4
0.55
0.15
1200

Qty produced

2228

1200

Profit

469.64

Qty used
14998

15000

Nutrient
Carbohydrate
Protein
Calories

Contribution per ounce (grams)

Product A
Product B
2
5
6
1
90
50

DV

Cost

0.2

0.1

total Price

Actual
Amount
42
14
490

Minimum
Amount
Required
20
12
450