CH 10 Supplementary

`Example 1.
Airline company
An airline owns an aging fleet of Boeing 737 jet airplanes. It is
considering a major purchase of up to 17 new Boeing model 757 and
767 jets. The decision must take into account numerous cost and
capability factors, including the following: (1) the airline can finance
up to $1.6 billion in purchase; (2) each Boeing 757 will cost $80
million, and each Boeing 767 will cost $110 million; (3) at least onethird of the planes purchased should be the 757; (4) the annual
maintenance budget is to be no more than $8 million; (5) the annual
maintenance cost per 757 is estimated to be $800,000 and it is
$500,000 for each 767 purchased; and (6) each 757 can carry 125,000
passengers per year, whereas each 767 can fly 81,000 passengers
annually. Formulate this as an integer programming problem to
maximize the annual passenger-carrying capability.
Example 2. Camping trip

A group of college students is planning to a camping trip during the
upcoming break. The group must hike several miles through the
woods to get to the campsite, and anything that is needed on this rip
must be packed in a knapsack and carried to the campsite. One
particular student, Tina Shawl, has identified eight items that she
would like to take on the trip, but the combined weight is too great to
take all of them. She has decided to rate the utility of each item on a
scale of 1 to 100, with 100 being the most beneficial. The items
weight in pounds and their utility values are given below.
Item
1
2
3
4
5
6
7
8
Weight
8
1
7
6
3
12
5
14
Utility
80
20
50
55
50
75
30
70
Maximum total weight due to distance is set to be 35 pounds.
Example 3. Capital budgeting

Quemo chemical company is considering three possible improvement
project for its plant: a new catalytic converter, a new software
program for controlling operations, and expanding the warehouse
used for storage. Capital requirement and budget limitations in the
next two years prevent the firm from undertaking all of these at this
time. The information is given below.
Project
Catalytic conv.
Software
Ware H. Exp.
Available fund
Net pre. Value

$25,000
$18,000
$32,000
year 1
$8,000
$6,000
$12,000
$20,000
year 2
$7,000
$4,000
$8,000
$16,000
Applications with Binary variables

At most one new warehouse
e.g. cant do both Y1 and Y2
Contingent decisions
e.g. can only do Y1 if Y2 is done
Threshold levels
A decision variable is either at least as large as a specified minimum,
or else it is zero (Examples: quantity discount; only take a field trip if
half the class goes, etc )
e.g. X must be >= m if X is nonzero
Example 4. California manufacturing company

The California manufacturing Co is considering expansion by
building a new factory in either Los Angeles or San Francisco, or
perhaps even in both cities. It also is considering building at most one
new warehouse, but the choice of the location is restricted to a city
where a new factory is being built. Total capital available for
investment is $10 million. Using the data in the table below, which
combination of investments maximizes the Net present value?
Decision
Decision Net present capital

variable
value
required
Build factory in L.A.
Y1 $9 million
$ 6 million
Build factory in San Fr. Y2 $5 million
$ 3 million
Build warehouse in L.A. Y3 $6 million
$ 5 million
Build warehouse in San.Fr. Y4
$4 million
$2 million
At most one new warehouse:
Contingent Decisions:
Formulation:
Fixed charge problem

Suppose that if a plant is operating, then it has a fixed cost of k and a
variable cost of c for each hour that it operates.
Example 5. R.F. Textile company

The R.F. Textile company can use any, or all, of three different
processes for weaving its standard white polyester fabric. Each of
these production processes has a weaving machine set-up cost and
per-square-yard processing cost. These costs and the capacities of
each of the three production processers are as follows:
Process numbers setup cost Processing cost Maximum daily
capacity
1
$50 $0.06
20,000
2
$80 $0.04
30,000
3
$100
$0.03
35,000
Daily demand is 40,000 square yards. Which machine should be used
(and at what volumes) in order to meet the daily demand?
Either or constraint
Only one of two constraints must hold
Example
Either 3X +2Y<=18
Or X+4Y<=16
k out of m constrains must hold

F1(x1,x2,,xn)<=d1
F2(x1,x2,,xn)<=d2
.
.
.
Fm(x1,x2,,xn)<=dm
Functions with T possible values

f1 ( x1 , x2 ,..., xn ) d1 ,or d 2 ,or ,...,or dT
Example 6. Functions
Formulate the following mathematical model as a mixed-integer
program
Max 3x1+2x2+2x3+3x4
S.t:
1) 2x1-x2+x3+3x4<=15
2) One of the following two inequalities must hold:
x1+x2+x3+x4<=4
3x1-x2-x3+x4<=3.
3) Two of the following four inequalities must hold:
5x1+3x2+3x3-x4<=10
2x1+5x2-x3+3x4<=10
-x1+3x2+5x3+3x4<=10
3x1-x2+3x3+5x4<=10.

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`Example 1.

Example 2. Camping trip

Example 3. Capital budgeting

Net pre. Value

Applications with Binary variables

Example 4. California manufacturing company

Decision Net present capital

Fixed charge problem

Example 5. R.F. Textile company

k out of m constrains must hold

Functions with T possible values

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