Linear Programming Simplex and Sensitivity Analysis A company imports electronic components that are used to assemble two

o different models of personal computers. One model, A, generates a profit contribution of 50 per unit while the other, B, generates a profit contribution of 40 per unit. For next weeks production a maximum of 150 hours of assembly time can be made available. Each unit of A requires three hours of assembly time and each unit of B requires five hours. In addition the company currently has in inventory 20 display units used in B; thus no more than 20 units of B can be assembled. Finally, only 300 square metres of warehouse space can be made available next week for new production of these products. Each unit of A requires eight square metres and each unit of B requires five square metres. (i) (ii) (iii) (iv) (v) Formulate this as a linear programming problem to find the optimal production schedule for next week. Find the solution to (i) using the Simplex Method. State the values and interpret the meaning of the dual variables. Find the range of values for the profit contributions with which the current solution will remain optimal Find the range of values within which the maximum number of assembly hours available must lie in order for the value of the appropriate dual variable found in (iii) to remain optimal.

Solution: (i) Let X1 = number of units of Model A assembled X2 = number of units of Model B assembled Maximise Subject to Z= 50X1 + 40X2 3X1 + 5X2 <= 150 X2 <= 20 8X1 + 5X2 <= 300 X1 , X2 >= 0

Put problem into standard form by adding a slack variable to the left hand side of each constraint to turn each into an equation. (Slack variables are S1 , S2 , and S3 for the first, second and third constraints respectively.

(ii)
Z S1 S2 S3 X1 -50 3 0 8 X1 0 0 0 1 X1 0 0 0 1 X2 -40 5 1 5 X2 1
5/8

S1 0 1 0 0 S1 0 1 0 0 S1

S2 0 0 1 0 S2 0 0 1 0

S3 0 0 0 1 S3

b 0 150 20 300 b 1875

75/2

Z S1 S2 X1

-35/4 25/8

25/4 -3/8

0 1/8

20
75/2

Z X2 S2 X1

X2 0 1 0 0

14/5 8/25 -8/25 -1/5

S2 S3
0 1 0

26/5 -3/25 3/25 1/5

b 1980 12 8 30

Optimal tableau. Solution X1* = 30( #lModel A assembled), X2* = 11 (#iModel B assembled).Total daily profit = 1980 (iii) Dual variables: One dual variable for each primal constraint i.e. three dual variables Y1, Y2, Y3 Y1* = 14.5 Y2* = 0 Y3* = 26/5 These represent the per unit changes in profit for changes in the right-hand-side values of the constraints: Y1* = 14/5 for every unit change in availability of assembly hours available, profit will change by 14/5 Y2* = 0 there will be no change in profit if the limitation of 20 VDUs for B is changed (Note that we only need 12 for the solution, so the constraint is not binding) Y3* = 26/5 for every unit change in square metres of storage available profit will change by 26/5 Note: these statements are only valid for changes which are made within certain limits.

(iv) Profit per unit for A (coefficient of X1) changes: Profit function becomes Maximise (50 + 1)X1 + 40X2 To determine optimal Z row:X1 Z X1 0 1 X2 0 0 S1 14/5 -1/5 S2 0 0 S3 26/5 1/5

Z row would be: X1 0 X2 0 S1

(14/5 1/51)

S2
0

S3
(26/5 + 1/51)

Solution remains optimal so long as Z row entries are not negative (maximisation): 14/5 1/51 >= 0 1 <= 14 26/5 + 1 >= 0 1 >= -26 -26 24 <= 1 <= 14 50 64

Profit per unit for B (coefficient of X2) changes: Profit function becomes Maximise 50X1 + (40+ 1)X2 To determine optimal Z row:X1 Z X2 0 0 X2 0 1 S1 14/5 8/25 S2 0 0 S3 26/5 -3/25

Z row would be: X1 0 X2 0 S1

(14/5 +8/252)

S2
0

S3
(26/5 3/252)

Solution remains optimal so long as Z row entries are not negative (maximisation): 14/5 + 8/252 >= 0 >= -35/4 26/5 - 3/251 >= 0 1 <= 130/3 125/4 40 250/3

(vi)

Assembly hour availability changed

b vector becomes

150 + 1 20 300

In optimal tableau b would be:

12 + 8/251 8 - 8/251 30 - 1/51 (Using current b column and current S1 column)

b entries must be non-negative: 12 + 8/251 >= 0 8 - 8/251 >= 0 30 - 1/51 >= 0 1 >= - 75/2 1 <= 25 1 <= 150 (redundant)

-75/2 <=

1 <= 25

Range for assembly hours: 225/2 150 175