Example for Recitations

Optimization Banner Chemical

Connor Makowski

ctl.mit.edu

Before Starting This Recitation

You should:

Have watched all of the lessons for this week

Recitation Agenda
Banner Chemical

Understanding the Formulation

Algebraic optimization model
Summation based optimization model

Formulating Banner Chemicals

Situation

Banner Chemicals manufactures specialty chemicals. One of their products comes in two
grades, high and supreme. The capacity at the plant is 110 barrels per week.
The high and supreme grade products use the same basic raw materials but require different
ratios of additives. The high grade requires 3 gallons of additive A and 1 gallon of additive B
per barrel while the supreme grade requires 2 gallons of additive A and 3 gallons of additive B
per barrel.
The supply of both of these additives is quite limited. Each week, this product line is allocated
only 300 gallons of additive A per week and 280 gallons of additive B.
A barrel of the high grade has a profit margin of $80 per barrel while the supreme grade has a
profit margin of $200 per barrel.

Question

How many barrels of High and Supreme grade should Banner Chemicals produce each week?

Step 1. Determine Decision Variables

XS

XH = Number of High grade barrels to produce per week

XS = Number of Supreme grade barrels to produce per week
Bounds XH 0

XS 0

XH
4

Formulating Banner Chemicals

Situation

Banner Chemicals manufactures specialty chemicals. One of their products comes in two
grades, high and supreme. The capacity at the plant is 110 barrels per week.
The high and supreme grade products use the same basic raw materials but require different
ratios of additives. The high grade requires 3 gallons of additive A and 1 gallon of additive B
per barrel while the supreme grade requires 2 gallons of additive A and 3 gallons of additive B
per barrel.
The supply of both of these additives is quite limited. Each week, this product line is allocated
only 300 gallons of additive A per week and 280 gallons of additive B.
A barrel of the high grade has a profit margin of $80 per barrel while the supreme grade has a
profit margin of $200 per barrel.

Question

How many barrels of High and Supreme grade should Banner Chemicals produce each week?

Step 2. Formulate Objective Function

Profit = 80XH + 200XS
Maximize z(XH, XS) = 80XH + 200XS

XS
(0,12)
(20,4)

(0,5)
(12.5,0)

Slides from Dr. Caplice

(30,0)

XH
5

Formulating Banner Chemicals

Situation

Banner Chemicals manufactures specialty chemicals. One of their products comes in two
grades, high and supreme. The capacity at the plant is 110 barrels per week.
The high and supreme grade products use the same basic raw materials but require different
ratios of additives. The high grade requires 3 gallons of additive A and 1 gallon of additive B
per barrel while the supreme grade requires 2 gallons of additive A and 3 gallons of additive B
per barrel.
The supply of both of these additives is quite limited. Each week, this product line is allocated
only 300 gallons of additive A per week and 280 gallons of additive B.
A barrel of the high grade has a profit margin of $80 per barrel while the supreme grade has a
profit margin of $200 per barrel.

Question

How many barrels of High and Supreme grade should Banner Chemicals produce each week?

Step 3. Formulate Constraints

Plant Capacity is 110 barrels
High

Supreme Available

XS

XH + XS 110

Additive A

3 gal

2 gal

300 gal

3XH + 2XS 300

Additive B

1 gal

3 gal

280 gal

XH + 3XS 280

Feasible
Region
XH
Slides from Dr. Caplice

Algebraic Formulation Banner Chemicals

Objective Function - The thing you

Max z(XH, XS) = 80XH + 200XS

subject to

are trying to maximize or minimize

XH +

XS 110

3XH +

2XS 300

XH + 3XS 280
XH

0
XS 0

Constraints - Limits to resources or

requirements of the system that must be

adhered to absolutely. Consists of a Left
Hand Side (LHS) function, that has some
relationship (,=,) to a Right Hand Side
(RHS) that must be satisfied.

Bounds or Non-Negativity Conditions

Decision variables typically cant be negative.

Decision Variables
The unknowns in the problem whose values you are trying to determine.
XH = Number of High grade barrels to produce per week
XS = Number of Supreme grade barrels to produce per week
Slides from Dr. Caplice

Moving to Summation Notation

Max z(XH, XS) = 80XH + 200XS
s.t.

XH +
XS 110
3XH + 2XS 300
XH + 3XS 280
XH
0
XS 0

Max

z=

iM

pi xi

Summation
from i to M

s.t.

iM

xi C

iM

aij xi Aj

xi 0

for all

"j N

"i M

is a
member of

Indices
Products i in M
Additives j in N
Input Data
pi = Profit margin for product i ($/barrel)
C = Plant capacity (barrels/week)
Aj = Additive j available (gallons/week)
aij = Quantity of additive j required per
barrel of product i (gallons/barrel)
Decision Variables
xi = Quantity of product i to produce (barrels)

Slides from Dr. Caplice

Questions, Comments, Suggestions?

Use the Discussion!

Margaret - After immersing herself in constrained

optimization
conmak@mit.edu

ctl.mit.edu