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Logistics Management Assignment 1

The document outlines a procedure for solving cases using mathematical modeling and linear programming. It then presents two cases involving production planning and store location planning to maximize profit or revenue. The procedure involves specifying the real problem, setting up a mathematical model, determining the mathematical problem, and interpreting the solution.

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Numan Rox
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202 views

Logistics Management Assignment 1

The document outlines a procedure for solving cases using mathematical modeling and linear programming. It then presents two cases involving production planning and store location planning to maximize profit or revenue. The procedure involves specifying the real problem, setting up a mathematical model, determining the mathematical problem, and interpreting the solution.

Uploaded by

Numan Rox
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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For each case the following procedure will be observed.

 Specify the real problem.


 Set up a mathematical model.
 Determine the mathematical problem.
 Interpret the solution.

Case one 1: Production planning at case chemicals.


Case Chemicals Company produces two solvents, CS-01 and CS-02, at its Cleveland plant. The
plant operates 40 hours per week and employs five full-time and two-part-time workers working
15 hours per week to run their seven blending machines that mix certain chemicals to produce each
solvent. This work force provides up to 230 hours of available labor in the Blending Department.
The products, once blended, are refined in the Purification Department, which currently has seven
purifiers and employs six full-time workers and one part-time worker who puts in 10 hours per
week. This work force provides up to 250 hours of available labor in the Purification Department.
The hours required in the Blending and Purification Departments to produce one thousand gallons
of each of the solvents are listed in the table below:

CS-01 01 CS-02
Blending 2 1
Purification 1 2

Blending and Purification Requirements (hr/1000 gallons)


Case Chemicals has a nearly unlimited supply of raw materials to produce the two solvents. It can
sell any amount of CS-01, but demand for the more-specialized product CS-02 is limited to at most
120 thousand gallons per week. The accounting Department estimates a profit margin of $0.30 per
gallon of CS-01 and $0.50 per gallon of CS-02. Because all employees are salaried and thus paid
the same amount regardless of how many hours they work, these salaries and the costs of machines
are considered fixed and are not included in the computation of the profit margin.
As a Production- Planning Manager, you want to determine the optimal weekly manufacturing
plan for Case Chemicals.

Linear Programming And Modelling Using Excel Solver


Problem Statement.

Answer Report.

Linear Programming And Modelling Using Excel Solver


Answer Report.

Linear Programming And Modelling Using Excel Solver


Sensitivity Report:

Linear Programming And Modelling Using Excel Solver


Case one 2:
A corporation plans on building a maximum of 11 new stores in a large city. They will build these
stores in one of three sizes for each location – a convenience store (open 24 hours), standard store,
and an expanded-services store. The convenience store requires $4.125 million to build and 30
employees to operate. The standard store requires $8.25 million to build and 15 employees to
operate. The expanded-services store requires $12.375 million to build and 45 employees to
operate. The corporation can dedicate $82.5 million in construction capital, and 300 employees to
staff the stores. On the average, the convenience store nets $1.2 million annually, the standard
store nets $2 million annually, and the expanded-services store nets $2.6 million annually.
How many of each should they build to maximize revenue?

Problem Statement.

Linear Programming And Modelling Using Excel Solver


Answer Report.

Linear Programming And Modelling Using Excel Solver

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