University of Pretoria

Department of Industrial and Systems Engineering

Operations Research BOZ 312

Lecturer: Mrs Wilna L Bean
Moderator: Prof Johan W Joubert

This paper comprises 2 questions. Please answer all the questions.

Marks for each question, or sub-question, are indicated in a square frame next to
the question in the left margin.

This is a closed book test.

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Calculators are allowed.

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rs eComplete all 2 questions for 43 marks
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Total time: 90 minutes
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11 May 2018 1 of 6 Semester test 2 Memorandum

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 Test questions

10 1. Use the simplex algorithm to solve the following linear program:

max z = 2x1 + 4x2 (1)

subject to

5x1 − 2x2 ≤ 8 (2)

2x1 + x2 ≤ 10 (3)
x1 ≥ 0 (4)
x2 urs. (5)

First convert the LP into standard form. Since x2 is unrestricted in sign, we have to define two
new non-negative variables (x02 and x002 ) to replace x2 :

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max z = 2x1 + 4x02 −4x002 (6)

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subject to rs e
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5x1 − 2x02 + 2x002 + s1 = 8 X (7)
2x1 + x02 − x002 + s2 = 10 (8)
x1 , x02 , x002 , s1 , s2 ≥0 (9)
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The objective function can then be rewritten as z − 2x1 − 4x02 + 4x002 = 0.

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We write the canonical form 0 and calculate the basic variables (BV) by setting the non-basic
variables x1 = x02 = x002 = 0.
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z x1 x02 x002 s1 s2 rhs BV

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row 0 1 -2 -4 4 0 0 0 z=0X
row 1 0 5 -2 2 1 0 8 s1 = 8 X
row 2 0 2 1 -1 0 1 10 s2 = 10 X
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The first entry variable is x02 as it has the highest negative coefficient in row 0. We then calculate
the ratios by dividing the RHS of each row with the coefficient of the entry variable in that row.
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z x1 x02 x002 s1 s2 rhs BV Ratio

row 0 1 -2 -4 4 0 0 0 z=0 -
row 1 0 5 -2 2 1 0 8 s1 = 8 No ratio X
row 2 0 2 1 -1 0 1 10 s2 = 10 10 X

and we see that row 2 is the winner of the ratio test as it has the lowest ratio (in this case the
only low with a valid ratio). Now we need to make the entry variable x02 a basic variable with a

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11 May 2018 2 of 6 Semester test 2 Memorandum

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 coefficient of 1 in the winning row (row 2). Now we can use elementary row operations (ero’s) to
calculate the new tableau.

z x1 x02 x002 s1 s2 rhs BV Calculation

row 0’ 1 6 0 0 0 4 40 z = 40 4row 2’ + row 0 X
row 1’ 0 9 0 0 1 2 28 s1 = 28 2row 2’ + row 1 X
row 2’ 0 2 1 -1 0 1 10 x02 = 10 row 2 X

This is the optimal tableau as there are no more variables with negative coefficients in row 0’.
The solution of this tableau is therefore: z = 40; s1 = 28; x02 = 10, x1 = x002 = s2 = 0. Note that
x2 = x02 − x002 , therefore the optimal solution to the problem yields an objective function value of
z = 40 when x1 = 0 and x2 = 10. X

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11 May 2018 3 of 6 Semester test 2 Memorandum

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 2. Fast Food Co is planning the production and distribution system for its new product over a four
year period. As part of the planning process the company needs to decide which plants and
distribution centres to open as well as when to open these facilities during the four year period.
Plants may be opened at any of the potential plant sites i ∈ I = {1, . . . , 8}, and distribution
centres may be opened at any of the potential distribution centre locations j ∈ J = {1, . . . , 10},
to meet the demands (in cases/ year), denoted by dkt , at customers k ∈ K = {1, . . . , 50} during
year t ∈ T = {1, . . . , 4}.
Each plant costs a fixed amount of C p rands to build and produces up to 30 000 cases per year
(if opened). Each distribution centre costs a fixed amount of C d rands to build and can handle
up to 15 000 cases per year (if opened). If opened, a plant incurs an annual operating cost of Op
rands and a distribution centre incurs an annual operating cost of Od rands if opened.
Transportation costs (in R/case) between plant i and distribution centre j are denoted by rij ,
while tjk denotes the transportation costs (in R/case) between distribution centre j and customer
k. No direct shipments from the plants to the customers are allowed.
We then define the following variables:
(
1 if a plant is opened at site i ∈ I at the beginning of year t ∈ T

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xit ,

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0 otherwise

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(
1 if a warehouse is opened at location j ∈ J at the beginning of year t ∈ T
yjt ,

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0 otherwise. rs e
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24 (a) If plants and distribution centres are not allowed to carry over any inventory from one year
to another, formulate an Integer Linear Program (ILP) to help Fast Food Co decide which
facilities to open, when to open these facilities and how to service customers in order to satisfy
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the annual demand at the lowest possible cost.

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We let:

pijt , the number of cases shipped from plant i ∈ I to warehouse j ∈ J during

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year t ∈ T .
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wjkt , the number of cases shipped from warehouse j ∈ J to customer k ∈ K ,

during year t ∈ T .

We can then model the problem as follows:

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X XX XX X
min z = rij pijt + tjk wjkt + Op xit (5 − t)
T
t∈T i∈II j∈J
J J k∈K
j∈J K i∈II
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X X X
+ Od yjt (5 − t) + C p xit + C d yjt (10)
J
j∈J i∈II J
j∈J

subject to

(11)

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11 May 2018 4 of 6 Semester test 2 Memorandum

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 X
wjkt ≥ dkt ∀k ∈ K , t ∈ T (12)
J
j∈J
X X
pijt = wjkt ∀j ∈ J , t ∈ T (13)
i∈II K
k∈K
X t
X
pijt ≤ 30 000 xil ∀i ∈ I , t ∈ T (14)
J
j∈J l=1

X t
X
wjkt ≤ 15 000 yjl ∀j ∈ J , t ∈ T (15)
K
k∈K l=1
X
xit ≤ 1 ∀i ∈ I (16)
T
t∈T
X
yjt ≤ 1 ∀j ∈ J (17)
T
t∈T
xit ∈ {0, 1} ∀i ∈ I , t ∈ T (18)
yjt ∈ {0, 1} ∀j ∈ J , t ∈ T (19)
pijt ≥ 0 and integer ∀i ∈ I , j ∈ J , t ∈ T (20)

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wjkt ≥ 0 and integer ∀j ∈ J , k ∈ K , t ∈ T (21)

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The objective function in (11) minimises the total cost of establishing and operating plants,
distribution centres, and shipping goods from plants to customers. Each year, demand must

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be met according to (12). To ensure that we are shipping all products sent from plants to
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customers, we introduce (13). Any product moved from a plant implies the plant is opened,
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according to (14). Similarly, any product moved from a warehouse implies the warehouse
is opened, according to (15). To ensure that plants and distribution centres are not opened
more than once, we include (16) and (16). Variable definitions take place in (18) through (21).
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The following criteria are assessed using a 0-1-2-3 rubric:

1. Definition of decision variables.

2. Objective function.
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3. Ensure demand satisfaction.

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4. Ensure everything moved from plants are shipped to customers.

5. Plant capacity and fixed charge enforcement.
6. DC capacity and fixed charge enforcement.
7. Ensure that plants and DCs not built more than once.
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8. Accessibility of information.
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3 (b) How would you modify your objective function in (a) if the fixed cost to build plants (C p )
and the fixed cost to build distribution centres (C d ) increased by 5% per year (from year two
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onwards)? Show your new objective function.

X XX XX X X
min z = rij pijt + tjk wjkt + Op xit (5 − t) + Od yjt (5 − t)
T
t∈T i∈II j∈J
J J k∈K
j∈J K i∈II J
j∈J
!
X X
t−1 p t−1 d



+ 1.05 C xit + 1.05 C yjt
i∈II J
j∈J

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11 May 2018 5 of 6 Semester test 2 Memorandum

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 The following criteria are assessed using a 0-1-2-3 rubric:

1. Including increase in objective function.

3 (c) What constraint(s) will you add to the formulation in (a) to ensure that if a plant is built at
location 4 in a year, then distribution centres must also be built at locations 2 and 9 in that
same year?

2x4t ≤ y2t + y9t ∀t ∈ T

The following criteria are assessed using a 0-1-2-3 rubric:

1. Ensure DCs 2 and 9 are built if plant 4 is built.

3 (d) What constraint(s) will you add to the formulation in (a) to ensure that in year 1 a distribution

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centre is built at either location 5 or 8?

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y51 + y81 ≥ 1

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The following criteria are assessed using a 0-1-2-3 rubric:
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1. Ensure that either DC 1, 5 or DC 8 (or both) is built in year 1.
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??? end of paper ???

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11 May 2018 6 of 6 Semester test 2 Memorandum

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