BUSINESS 2400

Decision Modeling
Feedback Test # 2
Fall, 2011
Thursday, November 3
c D.M. Tulett

All constraints must have the variables on the left-hand side of the , =, or sign, and their
purpose stated. Problems 2 and 4 are formulation problems only - DO NOT ATTEMPT TO SOLVE
THEM. This test contains six pages.

Surname

Given Name
Student Number
Section Number

(1 9:00-10:15; 2 10:30-11:45; 3 12:30-1:45)

Please do not write in the space below.

Question #
Mark
Out of

Total

25

25

25

25

100

1. Suppose that the objective of a two-variable optimization model is to maximize 6x1 + 5x2 , and that
we find by graphing that the binding constraints are:
(3) 3x1 + 8x2 53
(7) 5x1 + 2x2 43
Based on the above, the optimal solution is at X1 = 7, X2 = 4, and OFV = 62.
(a) (10 marks) For the objective function coefficients, find the allowable increase and decrease for
each coefficient (based on one-at-a-time changes).
(b) (15 marks) Suppose that the right-hand side of (3) is changed to 53 + b3 . Find expressions
for the values of x1 , x2 , and OFV as a function of b3 , and from the latter state the shadow price of
this constraint. [Do not worry about the allowable range.]

2. (25 marks) In the following table, the numbers along the top row and left column are node
numbers. The numbers inside the main body of the table are the the maximal flows along the arcs
between the nodes (in the indicated direction). The symbol means that no flow is possible in the
given direction.
from/to
1
2
3
4

2
13

3
7
3

4
8
9
15

(a) (7 marks) Draw a picture of the network, showing the flow limitations along the arcs (including
the dummy arc).
(b) (18 marks) Write the algebraic model which seeks to maximize the total flow from node 1 to
node 4. DO NOT SOLVE THE MODEL.

3. (25 marks)
A problem has been formulated as:
max
5X1
subject to
(1)
3X1
(2) 4X1
(3) 12X1

X1

2X2

+
X2 12
+ 6X2 9
10X2 5
X2 {0, 1, 2, . . .}

Use a solid dot to indicate all feasible integer solutions. Solve this problem graphically to determine the optimal values for X1 , X2 , and the OFV.
4

X2

X1

4. (25 marks) There are six communities located along the Trans-Canada Highway, none of which
has a fast-food restaurant. A restaurant chain is considering opening up to three restaurants in the six
communities (no more than one restaurant per community). They believe that they will capture 20%
of the market in those communities in which a restaurant is constructed. Furthermore, they believe
that they will capture 10% of the market in any community which does not have its own restaurant
but which is contiguous to a community (on either or both sides) which does have a restaurant. Each
restaurant would have an annual overhead cost of $200,000. Each customer would give an annual
contribution to profit of $50. The population of each community is:
Community
1
Population (000s) 5

2 3
23 8

4
5 6
16 30 4

R = number of restaurants built.

N1 = population (in thousands) of communities with a restaurant.
N2 = population (in thousands) of communities without a restaurant of their own but which are
contiguous to a community which does have a restaurant.


1 a restaurant is built in community i
Yi =
i = 1, . . . , 6.
0 otherwise

1 a restaurant is not built in community i, but

a restaurant is built is a contiguous community

Zi =

0 otherwise

i = 1, . . . , 6.

Write the objective function and the constraints for this problem. DO NOT SOLVE. No marks
will be awarded for re-stating the definitions of the variables.

This is extra space for any question.