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# Extra Problems for Chapter 6 CD-355

## EXTRA PROBLEMS FOR CHAPTER 6

CD6.1. Socker Shoes manufactures ‘‘Made in the USA’’ sneakers at plants in Tallahassee,
Florida, and Tucson, Arizona. The shoes are shipped weekly in truckloads from
each of the two plants to four regional distribution warehouses located in Allen-
town, Pennsylvania, Gary, Indiana, Houston, Texas, and Riverside, California. In-
ventory at each warehouse is evaluated on a weekly basis, and forecasts of de-
mands for additional shoes are faxed to Socker Shoe’s management. This
information determines the weekly production schedule for each plant and the
shipping pattern between the plants and warehouses.
During the week of February 14, the following requests were received from
the individual warehouses:
Warehouse Request
Allentown 6000
Gary 8000
Houston 9000
Riverside 15,000
Each plant can produce up to 19,000 pairs of shoes for the week, and production
costs for a pair of shoes are the same at each plant. The shoes are shipped via
truck in lots of 1000 pairs. The forecasted shipping cost per truckload from each
plant to each warehouse is given in the following table.

To
From Allentown Gary Houston Riverside
Tallahassee \$2,500 \$2,800 \$2,200 \$3,500
Tucson \$3,000 \$2,900 \$2,200 \$1,800

a. For the week of February 14, how many pairs of shoes should be produced in
Tallahassee? in Tucson?
b. What is Socker Shoes’ minimum cost shipping pattern for the week of February
14? What will be the total shipping cost?
CD6.2. Consider the Socker Shoe problem in problem CD6.1.
a. What is the largest value for the shipping cost from Tucson to Riverside for
which this solution remains optimal?
b. Suppose that the maximum weekly production capacity at each plant were
15,000 instead of 19,000. What is the new minimum cost shipping pattern?
What are the ramifications of this situation? Do you think this minimum cost
solution is tolerable? Explain.
c. Suppose that weekly production capacity is 25,000 at Tallahassee and 25,000
at Tucson. What is the new optimal shipping pattern? How should production
be scheduled between the two plants? Does this seem practical and sensible
from a management point of view?
CD6.3. Consider the Socker Shoe problem in problem CD6.1. Suppose Socker decided to
locate a plant in Juarez, Mexico, which is also capable of producing 19,000 pairs
of shoes per week. (It will therefore change the ‘‘Made in the USA’’ slogan to
Mexican drivers’ wages and benefits are lower, a factor that has been taken
into account in the following estimates of the shipping cost (per truckload) from
Juarez to the warehouse distribution centers:
To
Allentown Gary Houston Riverside
From
Juarez \$2800 \$2400 \$2000 \$1500
a. Suppose a tariff of \$2 per pair of shoes from Mexico exists. If this plant were
in operation, what is the effect on the production schedule for the week of

February 14 given that production costs per shoe are the same for the Juarez
plant as for the Tallahassee and Tucson plants?
b. Mexican production costs are substantially lower than U.S. costs, for both
labor and material. Estimates indicate that overall production costs in Mexico
are only 40% of U.S. costs. Currently, it costs roughly \$5.00 to produce each
pair of sneakers in the United States. Considering both the tariff costs and the
savings in production costs, what would be the effect on the production sched-
ule for the week of February 14?
c. Suppose that under union contract, Socker Shoe has agreed to produce at
least 30,000 pairs of sneakers each week in the United States. Modify your
formulation of part (b) and express the results in a transportation format. Solve
for the optimal production and shipping schedule for the week of February 14.
d. Under the North American Free Trade Agreement (NAFTA), all tariffs between
Mexico and the United States will be eliminated. At the same time, Mexican
wages should rise. Assume that the increase in driver wages would add \$400
per truckload to the figures given above. To what level (in terms of the per-
centage of U.S. production costs) would Mexican production costs have to rise
for there to be no difference between producing all the units in the United
States and producing some units in Mexico?
CD6.4. TransGlobal Airlines (TGA), based in New York City, is a charter airline with seven
pilots. In assigning routes, the most senior pilot chooses first, then the next most
senior, and so on. TGA discovered, however, that some pilots had very little pref-
erence, while others cared a great deal about which route they were assigned.
Hence, a senior pilot sometimes selected a route that a more junior pilot would
have preferred, even though the senior pilot was ambivalent about his or her
choice.
As a result of complaints from some of the junior pilots, TGA is considering
implementing a new policy. Each pilot, regardless of seniority, would rate in nu-
merical order his or her five most preferred cities as well as standby and vacation
preference. (Each period, one pilot is on standby and another pilot is on vacation.)
TGA would then create a schedule that maximizes overall pilot satisfaction (giving
the lowest total overall preference value).
a. Given the following rankings submitted by the pilots for the current scheduling
period, what schedule should be assigned?

Route
London Paris Moscow Hawaii Tokyo Standby Vacation
Captain Smith 1 2 5 3 4 6 7
Captain Jones 2 1 7 3 6 4 5
Captain Heinz 7 2 6 3 4 5 1
Captain Chang 2 1 6 4 7 5 3
Captain Wells 1 3 7 2 4 6 5
Captain Blinn 2 3 7 1 6 5 4
Captain Klein 5 4 7 3 2 6 1

b. The pilots are listed in order of seniority. Explain why Captain Smith and Cap-
tain Jones, the two most senior pilots, are particularly upset with this period’s
schedule.
CD6.5. Consider the TGA problem in problem CD6.4. When TGA attempted to schedule
pilots using the new policy, it found that there can be many options for the total
minimal ranked schedule. Furthermore, sometimes the most senior pilots are
relegated to routes they truly do not prefer, while more junior pilots receive their
first choice. Another problem is that such a ranking procedure does not show the
depth of displeasure between one route and the next. For example, Captain Smith
may be relatively indifferent to the London and Paris routes, but certainly prefers
either to Hawaii (his third choice).
Extra Problems for Chapter 6 CD-357
In an effort to take seniority into account, a young management consultant
has suggested another method. Each pilot would receive 10 points for each year
of service to distribute in any manner among the five routes, standby, and vaca-
tion. Suppose this method yielded the following point scores for this period.
Route
London Paris Moscow Hawaii Tokyo Standby Vacation
Captain Smith 115 115 0 0 0 0 0
Captain Jones 50 150 0 10 0 0 0
Captain Heinz 0 50 0 50 50 0 50
Captain Chang 75 100 0 0 0 0 15
Captain Wells 160 0 0 0 0 0 0
Captain Blinn 0 0 0 80 0 0 0
Captain Klein 20 10 10 1 4 3 2

a. Construct a lost opportunity matrix from these points by replacing the num-
bers in each column by the difference between the numbers and the maximum
number in the column.
b. Solve the optimal assignment using this approach.
c. Why is Captain Smith still unhappy? How could Captain Smith be assured of
always getting his first preference using this approach?
d. List some other potential pitfalls that might occur using this approach. Sug-
gest other approaches that might be fairer.
CD6.6. The Orange County Transportation Commission is planning to develop a road
system linking Mission Viejo (City 1) and Fullerton (City 10). Two proposals are
under serious consideration:
a. A series of six-lane ‘‘superstreets’’ linking all 10 Orange County cities between
Mission Viejo and Fullerton.
b. A 10-lane freeway extension connecting Mission Viejo with Fullerton (which
does not necessarily pass through all 10 cities).
Forecasts indicate that either proposal will improve north-south traffic flow
through the county and ease traffic congestion on other secondary streets. The
proposed transportation corridors are depicted in the following network, including
mileages between various Orange County cities.

5
2 5
9 8
6
2
8

7 8
Mission Viejo 4
1 7
4 7 11
12
1

5
5

10
8
2

3 3 9 Fullerton
8
6 9

## Superstreets are estimated to cost taxpayers \$500,000 per mile to build,

whereas each mile of freeway will cost \$700,000. Although many factors should
be considered, if total cost is the primary consideration, which system would
Orange County taxpayers prefer?
CD6.7. The Wichita State University (WSU) baseball team is preparing for the upcoming
college world series. It has two games left in the regular season, followed by at
least two games in the double elimination world series tournament. WSU has

already played three of the four teams—Texas (UT), Arizona State (ASU), and
Florida State (FSU)—and is very familiar with its other opponent, California State
University, Fullerton (CSUF).
WSU has four starting pitchers and will start a different one against each
team. Based on past performance, the WSU coach has compiled an effectiveness
statistic for each pitcher based on the pitcher’s and the opponent team’s strengths
and weaknesses. He has used these statistics throughout the year, which may
account for his successful 45–12 won–lost record. The effectiveness statistics for
these opponents are as follows.
EFFECTIVENESS FACTORS
UT ASU FSU CSUF
Clyde Rollins 62 65 80 50
Carlos Pascual 76 70 82 55
Sid Thompson 75 40 77 57
Ted Quillici 45 48 50 36

a. Based on these factors, which pitcher should WSU start against each team to
maximize the total overall effectiveness rating?
b. Suppose the WSU coach will let a pitcher start up to two games. Modify the
problem and solve first as an assignment problem and then as a transportation
problem.
c. Use the transportation model format to determine the starting pitchers if the
WSU coach will allow a pitcher to start as many as three games.
CD6.8. During the early 1970s, the political scandal Watergate shook the United States
and toppled a presidency. While there were many aspects to the episode (robbery,
enemies lists, abuse of power, cover-ups, etc.), a key component was the ‘‘laun-
dering’’ of funds from big money contributors to campaign coffers. This practice
consists of channeling a large ‘‘gift’’ of money through various banks and individ-
uals so that its source cannot be traced. Unfortunately, such activities continue
today as evidenced by congressional investigations beginning in 1997.
Suppose millionaire I. S. Halverson has \$5000 (in reality, he would probably
have 10 or 100 times this amount) that he would like to donate ‘‘anonymously’’
to the Independent National Party (INP). He might first split the money up in
smaller units and deposit the money in several bank accounts spread throughout
the world. Money from these accounts could be mixed or further divided and sent
to other accounts or individuals, who, in turn, would do the same, until several
checks for \$1000 or less eventually arrive at party headquarters.
To avert suspicion, a limit has been placed on the amount of each transaction
between intermediaries. These limits are given in the following network depicting

1500
1 6
200
30
0 4
00

0
20

10
400

10
100

00
2000
0

2 100 5
0 10
00
I.S. Halverson
0
25

200 INP
0
1000

## Numbers on the arcs represent the maximum amount

that can be laundered in either direction.
Extra Problems for Chapter 6 CD-359
I. S. Halverson, the intermediaries, and the INP. Given these limitations, how
much of the \$5000 can I. S. Halverson launder to the INP?
(Note: The federal government employs management scientists who also use such
models to help determine transaction limits that should be monitored.)
CD6.9. Luxor Motorhomes has two plants, one in Riverside, California, and the other in
Des Moines, Iowa. Each plant can produce three different models: the Grand
Cruiser, the Traveler, and the Weekender. Labor time at the Riverside plant limits
production to 600 models per month, while the Des Moines plant can produce
up to 1000 models per month. The manufacturing costs and monthly production
capacities for each model vary, depending on the plant. These costs are sum-
marized in the following table.
MANUFACTURING COSTS AND MAXIMUM MONTHLY PRODUCTION LEVELS
Riverside Des Moines
Manufacturing Cost
Grand Cruiser \$53,000 \$50,000
Traveler \$29,000 \$27,000
Weekender \$18,000 \$17,000
Maximum Monthly Production
Grand Cruiser 200 400
Traveler 500 500
Weekender 600 900

Once the units are manufactured, they are shipped to central distribution
locations in Florida, Texas, and California, where they are ultimately purchased
by retailers. The demand for motorhomes at the distribution locations for this
month’s production is as follows.
DEMAND FOR MOTORHOMES
Florida Texas California
Grand Cruiser 100 50 150
Traveler 200 100 300
Weekender 225 175 250

## The transportation costs for shipping a motorhome from a plant to a distri-

bution center are independent of the model. These are given in the following table.
MOTORHOME SHIPPING COSTS
Florida Texas California
Des Moines \$1,000 \$800 \$1,200
Riverside \$2,000 \$700 \$ 300

## Formulate this problem as a capacitated transshipment problem and solve

for the optimal production and distribution of motorhomes during this month.
(Hint: Define a set of nodes for the plants, a set for the models, and a set for the
models at the distribution locations.)
CD6.10. Thirteen Savage Beasts is a popular rock group that has toured all over North
America. It is now beginning its Japanese tour and will be playing to a sold-out
house in a major sports stadium in Osaka.
After strategically positioning 12 banks of loudspeakers, the manager for the
group has found that the local government requires all cables and wires be housed
in specially insulated rigid casings. (In the United States, the group simply lays
the cables along the ground or across rafters, but this is unacceptable to the
Japanese authorities.)
A diagram of the stage area and the 12 banks of loudspeakers is shown in
the following figure. What is the minimum amount of the insulated casings the
group must purchase before the rock concert can proceed? (Note: Loudspeakers may
be connected to one another or directly to the stage.)

35 40
1 2 3
49
43

20

29
42
47 51

26

70
4 STAGE 30 5
71

32

33
60

79
6 7

62
81

47

75
43
61

77
8 9
70

26
31 44
62 55
10 12 11

## Distances are in meters

CD6.11. The small rural town of Campton has only one elementary school. Beginning early
every morning, a school bus leaves the school, picks up children at five stops,
and returns to the school. The following table gives the distances between the
stops.
MILES BETWEEN PICKUP POINTS
Old General
Crossroad Willow Creek Jones House Highway Store Red Barn
School 6 29 24 10 25 12
Crossroad 19 21 20 10 8
Willow Creek 5 27 15 7
Jones House 16 26 4
Old Highway 37 11
General Store 18

a. What is the minimum total distance the school bus must travel each morning?
b. If the school bus averages 30 miles per hour, at what time must the school
bus leave the school each morning in order to deliver the children to the school
by 7:55 A.M. (5 minutes before school starts)?
c. Prepare a bus schedule giving the pickup time at each stop if the bus averages
30 miles per hour.
CD6.12. The Campton Elementary School (problem CD6.11) has been concerned about
vandalism that has occurred to the school bus while it is parked overnight in the
school parking lot. Accordingly, it has found a secure location eight miles from
the school, where the bus can be parked overnight. The distances from the bus
facility to the pickup sites are as follows.
Willow Jones Old General
Crossroad Creek House Highway Store Red Barn
Bus facility 14 22 20 18 30 17
a. What is the minimum total distance the school bus must travel each morning?
(Be sure that the last route traveled is the one from the school back to the bus
facility.)
b. If the school bus averages 30 miles per hour, at what time must the bus leave
the secure location each morning in order to deliver the children to the school
by 7:55 A.M. (5 minutes before school starts)?
c. Prepare a bus schedule giving the pickup time at each stop if the bus averages
30 miles per hour.
Extra Problems for Chapter 6 CD-361
CD6.13. John Stanford is at the end of a two-year lease on his Lincoln Town Car, and,
although he is determined to drive a Lincoln Town Car for the next four years
(until his twins go to college), he simply refuses to lease another car, claiming,
‘‘Ownership is the only way.’’ John can either purchase his two-year-old Lincoln
or purchase a new one. At the start of any subsequent year, he can trade in his
Lincoln for a new one. At the end of the fourth year, however, he will definitely
trade in his Lincoln for a Porsche, which he and his wife will share.
John would like to determine the optimal purchase/trade-in policy for the
next four years. To aid him in his decision process, the salesperson at the Lincoln-
Mercury/Porsche dealership (in whom John places complete trust) has given him
the following information.
PROJECTED COST OF A NEW LINCOLN TOWN CAR
This Year Year 2 Year 3 Year 4
\$40,000 \$42,000 \$45,000 \$50,000

## TRADE-IN VALUE OF A LINCOLN TOWN CAR (Percent of original purchase price)

Age of Vehicle
1 Year 2 Years 3 Years 4 Years 5 Years 6 Years
70% 50% 34% 20% 10% 5%

## YEARLY OPERATING COST

Age of Car at the Beginning of the Year
New 1 Year 2 Years 3 Years 4 Years 5 Years
\$2,000 \$3,000 \$5,000 \$6,000 \$9,000 \$8,000
The yearly operating costs include insurance, license, and normal repairs and
reflect the fact that the first year carries a full warranty, the second year a limited
warranty, and in the fifth year (when the car is four years old at the beginning of
the year) there is a major 60,000-mile service.
Since John has been a valued lease customer, the dealership will allow him
to purchase his current two-year-old vehicle (which cost \$36,000 new) for the two-
year trade-in price of .50(\$36,000) 5 \$18,000.
a. Complete the following shortest path representation of this problem.
b. Solve this shortest path problem to determine the optimal purchase/trade-in
policy.

Operating
Cost
Age at 4
Beginning of
Year 2
00
Purchase + 60 ep
Operating Cost Ke Purchase +
Operating Cost-
31

ar
Bu

00 ld C
,76
y

,0 2
Ne

O
0

23 ar
w

Ye
Ca

2
uy
r

B
START 00
42,00 30
0 ep
New Ke 14,000
Car 1 1

## Year 1 Year 2 Year 3 Year 4 Year 5

CD6.14. Topless City is a small chain of car dealerships that sells vintage convertibles
throughout the Southern United States. It is owned and managed by Brandon and
Kyle Winslow. Each month Brandon and Kyle attend two car auctions, at which
they purchase convertibles: one in Atlanta, the other in Miami. The cars are then
shipped to one of three locations: Jackson, Mississippi, Birmingham, Alabama, or
Orlando, Florida. There, the cars are refurbished, repainted, safety inspected, and
sold at the Topless City dealership in that city.
In August, Brandon found 20 cars at the Atlanta auction, and Kyle found 50
cars at the Miami auction which met the needs of the company. Only 15 cars can
be worked on at each city during the month, however. Another auction is coming
up in September; thus, only 45 cars are to be purchased in August.
Topless City wishes to minimize its costs of transporting the cars to the re-
furbishing locations. The cost to transport cars between cities is as follows.
Jackson Birmingham Orlando
Atlanta \$200 \$100 \$175
Miami \$250 \$200 \$125

## a. Give a linear programming formulation for this problem.

b. Formulate the problem as a transportation problem and solve.
c. Do the assumptions of the transportation model appear to be valid for this
problem? Comment.
CD6.15. Consider the problem faced by Topless City in problem CD6.14. For some time
now, Brandon and Kyle have been considering converting their facilities in these
three cities to sales lots only and performing all refurbishing operations in other
cities. If they do so, they can actually use all 70 cars: 15 in Jackson, 25 in Bir-
mingham, and 30 in Orlando.
One plan under consideration is to contract out the painting to shops in
Tuscaloosa, Alabama, and Columbus, Georgia, and then transport the cars for
mechanical work to shops in Montgomery, Alabama, and Gainesville, Florida, be-
fore delivery to a Topless City location. Alternatively, a full-service operation in
Jacksonville could handle both the painting and mechanical work.
a. Given the following tables, which reflect the average unit transportation costs
per vehicle between locations, formulate the problem as a transshipment
problem and solve for the optimal shipping patterns. How many cars are
painted and fixed mechanically in each location? Explain.
To
Tuscaloosa Columbus Jacksonville
FROM
Atlanta \$150 \$ 75 \$150
Miami \$200 \$175 \$125

To
Montgomery Gainesville
FROM
Tuscaloosa \$50 \$100
Columbus \$50 \$ 75

To
Jackson Birmingham Orlando
FROM
Montgomery \$130 \$ 70 \$110
Gainesville \$150 \$135 \$ 45
Jacksonville \$180 \$130 \$ 60

b. After painting and refurbishing the vehicles and deducting other expenses
(sales personnel, utilities, etc.), the average gross profit is \$x per car. Based
Case CD6.1: The Sandy Company CD-363
on the August auction figures, what breakeven value of x would justify imple-
menting the new plan of buying and selling all 70 cars, rather than maintaining
the current policy of purchasing 45 cars and doing all the work at Topless City
locations?
c. Solve for the shortest path (in terms of cost) from Atlanta to the Topless City
locations; solve for the shortest path from Miami to the Topless City locations.
d. Use the results of part (c) to convert the transshipment problem to a trans-
portation problem. Solve and show that the solutions are equivalent to those
found in part (a).

## CASE CD6.1: The Sandy Company1

The Sandy Company is an excavation company located in pose. The transportation cost per bulldozer is \$200 plus \$6
southwestern Colorado. In recent months, the company has per mile from any storage location to any excavation site.
expanded its activities, purchased several new bulldozers, The four sites require a total of 21 bulldozers: five at Los
and sought out new contracts. This past week it successfully Bungalos; six at Buffalo Valley; six at Parker Falls; and four at
obtained a contract for a new project to begin on July 15. The Upper Lufferton. Thus, the fixed cost, over which the Sandy
contract involves excavation at four separate sites in the area: Company has no control, is \$4200 each way (5 21 3 \$200).
(1) Los Bungalos, (2) Buffalo Valley, (3) Parker Falls, and (4) The company must determine the most efficient routes to
Upper Lufferton. travel from each of the storage sites to the excavation sites
A major cost faced by the Sandy Company is the trans- and how many bulldozers it wishes to transport from each
portation of bulldozers from their sites at the three storage storage site to each excavation site.
locations of Groveton, High Point, and Grand River along The Sandy Company has 24 bulldozers: eight at Grove-
some very narrow construction roads to the excavation sites. ton; nine at High Point; and seven at Grand River. The bull-
The bulldozers will be transported by the Emmons Company dozers must be returned to their original sites. A map de-
using commercial trailers specifically designed for this pur- tailing the distances between junction points of the
construction roads and between the storage sites and the
1
This case is based on a problem developed by Dr. Zvi Goldstein, excavation sites follows. Complicating the process is the pos-
California State University, Fullerton. sibility that the project will not be completed until late Oc-

Parker
Falls Upper
Lufferton
120

45 16 2 Buffalo
15

12

14 1 Valley
36
0 120
15
15
80
60
150

12 1 Los
30

0 Bungalos
15
30 10 13
9 3
81

11 4 12 18
105

12 5
12

8
0

48
210

24
120

6 7
5
45

18
30

45 30
15

1 2 3 4
0
15

135

0
12
60

150

90

18

Groveton
High Point
Grand River

tober. By that time snow could make certain roads impass- Grand River– Junction 13– Junction 2–
able. In particular, the roads between Grand River and Junction 4 Los Bungalos Junction 15
Junction 4, and between Junction 13 and Los Bungalos are 4. Open Closed Open
very susceptible to closure. In addition, a new 70-mile con- 5. Closed Open Closed
struction road between Junction 2 and Junction 15 may be 6. Closed Open Open
open. 7. Closed Closed Closed
Prepare a report that includes the following. 8. Closed Closed Open
1. The minimum cost distribution and transportation plan 3. An analysis of the situation in which Sandy knows in ad-
to the excavation sites under current conditions vance that both the Grand River–Junction 4 road and the
2. Given that the bulldozers have been allocated as in (1), Junction 13–Los Bungalos road will be closed on the re-
a minimum cost return transportation plan under each turn trip (i.e., suppose the roads automatically close on
of the eight possible sets of conditions: October 1). Recommend a minimum cost distribution
Grand River– Junction 13– Junction 2– and transportation plan for both the case in which the
Junction 4 Los Bungalos Junction 15 Junction 2–Junction 15 road is open and the case in
which it is closed (cases 7 and 8).
1. Open Open Closed (Current)
2. Open Open Open (Hint: Since the bulldozers must be returned to their original
3. Open Closed Closed sites, round-trip mileages must now be considered.)

## EXTRA PROBLEMS FOR CHAPTER 7

CD7.1. St. Paul’s Episcopal Church has a parking lot in need of repair. It has determined
that these repairs will cost around \$150,000, although formal bids have not yet
been solicited from construction companies. The clergy has determined that the
following set of activities make up the project.

## Activity Immediate Predecessors

A: Inform congregation of upcoming project —
B: Solicit funds in church and newsletter A
C: Obtain bids A
D: Do volunteer parking lot preparation work C
E: Solicit by telephone C
F: Borrow remaining funds B, D, E
G: Choose company and have work performed F

## Draw an activity on node representation of this project.

CD7.2. George Washington High School is planning a reunion for the graduating class of
1975. The D’Onofrio twins, who are in charge of planning the entire event, have