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The document contains solutions to a test for ISyE 2030, covering various problems related to inventory management, queueing systems, linear programming, demand distribution, and cost minimization. Each problem is presented with specific scenarios and calculations, leading to answers that include profit calculations, optimal stock levels, and formulations for linear programs. The solutions demonstrate the application of mathematical principles to real-world situations in operations research.

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Lemma Bali
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0 views

qu2

The document contains solutions to a test for ISyE 2030, covering various problems related to inventory management, queueing systems, linear programming, demand distribution, and cost minimization. Each problem is presented with specific scenarios and calculations, leading to answers that include profit calculations, optimal stock levels, and formulations for linear programs. The solutions demonstrate the application of mathematical principles to real-world situations in operations research.

Uploaded by

Lemma Bali
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ISyE 2030 — Test 2 Solutions


Fall 2004

This test is open notes, open books. Do precisely 5 of the following problems — your
choice. You have exactly 55 minutes.

1. Suppose that we are simulating the sales of turkeys at a local market. The owner
starts off with 10 turkeys. The daily demand for turkeys for the next 6 days is as
follows.

9 3 8 5 2 7

Each turkey costs the owner $7 to buy, and can be sold to a customer for $13. It
costs the owner $1 to store each turkey overnight (i.e., if it wasn’t sold that day).
It also costs the owner $2 per turkey if he is unable to fill a demand — maybe the
irate customer does damage to the store. If, at the end of a particular day, the
owner has less than or equal to 3 turkeys in stock, he places an order to bring the
inventory level back up to 10 the next morning. He gets the turkeys the first thing
in the morning before any customers arrive. Compute his total profit/loss for this
6-day period. How many turkeys are left at the end of the last day?

ANSWER: There are a number of interpretations for this problem, all of which are
perfectly acceptable, as long as you state the assumptions you used. In the answer
that I’ll now display, let’s assume:

• We have to pay for the initial 10 turkeys.


• We have no holding cost for the first day.
• We don’t have to pay holding costs for any turkeys left over after the last day.

So here’s what happens. . .


2

Day t Demand Dt Inventory at Order Quantity


End of Day It
0 – 10
1 9 1 9
2 3 7 0
3 8 −1 10
4 5 5 0
5 2 3 7
6 7 3 0

Our earnings are therefore

Turkeys bought (7 units) −$252


Holding cost (16 units) −$16
Stockout cost (1 unit) −$2
Turkeys sold (33 units) $429
TOTAL $159

Further, note that 3 turkeys are left. ♦


3

2. Consider a queueing system with customers arriving according to a Poisson


process at the rate of 5 per hour. Which of the following systems gives the
lower steady-state expected time in system (i.e., waiting in line plus service
time)? (A) Two “slow” parallel servers, each of whom can serve customers with
Exp(3/hour) service times, or (B) One “fast” server, who can serve customers with
Exp(6/hour) services? Show all work.

ANSWER: (A) Here we have an M/M/2 queueing system with λ = 5, µ = 3, and


c = 2. Thus, ρ = λ/(cµ) = 5/6.

Going to the M/M/2 tables, we do a little calculation and come up with P0 = 1/11,
and with a little more algebra, we have L = 60/11.

Finally, w = L/λ = 1.1 hours.

(B) Meanwhile, now we have we have an M/M/1 queueing system with λ = 5 and
µ = 6. Thus, ρ = λ/µ = 5/6 (still).

Going to the M/M/1 tables, we do a teensy calculation and come up with


1
w = = 1.
µ(1 − ρ)

Thus, choose the M/M/1. ♦


4

3. The Reddy Mikks Company owns a small paint factory that produces both interior
and exterior house paints for wholesale distribution. Two basic raw materials, A
and B, are used to manufacture the paints. The maximum availability of A is 8
tons/day. The max availability of B is 6 tons/day. The daily requirements of the
raw materials per ton of interior and exterior paints are summarized as follows:

• For a ton of exterior paint, you need 1 tons of A and 1.5 tons of B.
• For a ton of interior paint, you need 2 tons of A and 1 ton of B.

A market survey has established that the daily demand for interior paint cannot
exceed that of exterior paint by more than one ton. The survey also shows that the
demand for interior paint is limited to 2 tons daily. The wholesale price per ton is
$3000 for exterior paint and $2000 for interior paint.
We are interested in finding the mix of interior and exterior that maximizes gross
income.

(a) Formulate this problem as a linear program.

ANSWER: Let x denote the amount of interior; let y denote the amount of
exterior. Here is the formulation.

max 2000x + 3000y


s.t. 2x + y ≤ 8
x + 23 y ≤ 6
x≤y+1
x≤2
x, y ≥ 0.

♦
(b) Draw a graph illustrating the relevant inequalities.
(c) What is the best mix of paints to produce?

ANSWER: Draw the picture, and check the corners, and you’ll see that the
answer is (x, y) = (2, 8/3) or (0,4) (or a linear combination of the two). The
reason for the linear combination is that the optimal answer is actually a line
segment. ♦

(d) Write out relevant Xpress code.


5

4. A newsvendor faces the following discrete demand distribution:

X P (Demand = X)
20 0.20
21 0.15
22 0.20
23 0.25
24 0.20

The newsvendor buys the papers for 60 cents and sells them for $1.00. Leftover
papers are salvaged for 10 cents each.

(a) What would the marginal benefit be to the newsvendor of going from 21 to
22 papers?

ANSWER: Let p denote the probability of selling the xth unit, and let D
denote the demand.

x P(D = x) p 1−p 0.4p = 0.5(1 − p) = Exp net profit


Exp profit from Exp loss from not from stocking
selling xth unit selling xth unit xth unit
<20 0
20 0.20 1.00 0.00 0.40 0.00 0.40
21 0.15 0.80 0.20 0.32 0.10 0.22
22 0.20 0.65 0.35 0.26 0.175 0.085
23 0.25 0.45 0.55 0.18 0.275 -0.095
24 0.20 0.20 0.80 0.08 0.40 -0.32
>24 0.00 0.00 1.00 0.00 0.50 -0.50
Thus, you get 0.085 more going from 21 to 22. ♦

(b) What’s the optimal number of papers to stock each day?

ANSWER: 22. ♦
6

5. The Village Butcher Shop makes its meat loaf from a combination of lean ground
beef and ground pork. The beef contains 70% meat and 30% fat and costs the
shop 80 cents per pound; the pork contains 60% meat and 40% fat, and costs 60
cents per pound. We are interested in determining how much of each kind of meat
the shop should use in each pound of meat loaf if it wants to minimize its cost and
to keep the fat content of the meat loaf to no more than 35%. I just want you to
formulate this problem — you don’t have to solve it.

ANSWER: Let B denote the amount of beef and P the amount of pork. Here is
the formulation.

min 0.8B + 0.6P


s.t. 0.3B + 0.4P ≤ 0.35
B+P =1
B, P ≥ 0.

♦
7

6. Formulate the “making change” problem (i.e., cashier returns as few coins as
possible) assuming the cashier will give back only coins of value 1 cents, 5 cents,
10 cents, 25 cents, and $1.00 (yes, there is a $1.00 coin), and the change you will
receive is $5.67. Make sure to clearly define the variables.

ANSWER: Let

x1 = number of pennies used


x2 = number of nickels used
x3 = number of dimes used
x4 = number of quarters used
x5 = number of dollars used

Here is the formulation.


P5
min i=1 xi
s.t. 0.01x1 + 0.05x2 + 0.1x3 + 0.25x4 + x5 = 5.67
xi ≥ 0 and integer for all i.

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