Department of Management, UTSC MGOC10H3Y Analysis for Decision Making L01 Assignment #2 Summer 2013

Due Friday June 14 in class. Late assignments will not be accepted. Please clearly put your section number on your assignment.

Problem 1 Larkin Industries has an order for 1200 door lock units from a condo developer. Each lock unit consists of 3 components: the knob and face plate, the actual lock itself, and a set of two keys. Although the processes used in the manufacture of the three components vary, there are three areas where the production manager is concerned about the availability of resources. These 3 areas, their usage by the 3 components, and availability are shown. Larkin does not have enough resources to fill this contract. A subcontractor, who can make an unlimited number of each of the three components, quotes prices below. Resource Brass Alloy Machining Finishing Component Knob and Plate Lock Keys (set of 2) Knob and Plate 12 18 15 Lock 5 20 5 Key (each) 1 10 1 Larkin Cost 6.00 4.00 .50 Available 15000 units 36000 minutes 12000 minutes

Subcontractor Cost 10.00 9.00 1.00

(a) Develop a LP model that would tell Larkin how to fill the order for 1200 lock sets at the minimum cost. Solve the model using LINGO and provide the optimal solution. Attach your LINGO output. (8 + 2 = 10 marks) (b) Are there any unused resources, if yes which one? What is the amount of money spent purchasing components from Subcontractor? What is the range for the machining time for which its dual price will remain at the current value? What is the range of Larkins cost for making lock for which the current solution will remain unchanged? (2+ 2 + 2 + 2 = 8 marks)

Problem 2 A large supermarket store is open from 9am to 7pm. From past experience, the supermarket knows that it needs the following number of cashiers: 9 10a = 1, 10 11a = 2, 11a 12p = 3, 12 1p = 4, 1 2p = 5, 2 -3p= 6, 3-4p = 7, 4-5p = 8, 5-6p = 9, 6-7pm = 10. The Supermarket hires two types of cashiers. Full time cashiers work 8 hour shift which includes 1 hour off for lunch which must be taken immediately after 3 hours of work. Full time cashiers are paid $8/hr (this includes payment for lunch hour). Part time cashiers can work either 3 or 4 hour shift between 11a 4pm and is paid $5/hr. Formulate an LP to meet the cashier requirements at minimum cost. (10 marks)