Haramaya University

College of Business and Economics

Department of Economics
Masters of Energy Economics
Decision Modeling (ENEC531) Assignment
Instructor: Gemechu Mulatu (PhD)

 Your answer should be clear, neat and to the point

 Do it individually

 The teacher is not responsible for any failure to respect the submission date and dishonesty

 Show all the necessary steps clearly

 Support your answer with graphs and interpretation.

 Working together is encourageable but copying from each other is strictly forbidden.

 Submission date is to be decided based on the university final exam schedule

1. Write short notes on Steps in Decision Modeling

2. Discuss assumptions of linear programming problems
3.

Solve using

a. simplex method

b. verify your answer using graphical method

c. verify your answer using solver table on excel

4. Maximize Z = 5x 1 + 2x2 + x3

Subject to : x1 + 3x2 - x3 ≤ 6,

x 2 + x3 ≤ 4,

3x1 + x2 ≤ 7,

1 2 3 ≥ 0.
x ,x ,x

5. Solve Linear programming problem Min. Z =25 X 1 +30 X 2

St :
20 X 1 +15 X 2 ≥100
2 X 1 +3 X 2 ≥15
X 1 , X 2 ≥0

1
 a. Use graphical method

b. Use simplex method and verify your answer

c. Use big M-method and verify your answer

d. Use excel solver table and verify your answer

6. A firm makes two types of furniture chairs and tables. The contribution for each product to objective function is birr 20 per chair and birr 30 per table

respectively. Both products are processed on three Machines M1, M2 and M3. The time required (in hours) by each product and total time available per week on each

machine are as follows:

Machine Chair Table Available time

M1 3 3 36

M2 5 2 50

M3 2 6 60

How should the manufacturer schedule his production in order to maximize contribution?

7. Consider the transportation problem having the following parameter table:

Destination Supply

1 2

Source 1 8 5 4

2 6 4 2

Demand 3 4

a. North-West Corner (NWC) Method, Least Cost Method (LCM), and Vogel’s Approximation (or penalty) Method (VAM, obtain the initial basic feasible solution

and show the corresponding total transportation cost.

b. Reformulate this problem as a general linear programming problem.

8. Agricultural goods have to be transported from sources S1, S2 and S3 to destinations D1, D2 and D3. The transportation cost per unit, capacities of the sources

and requirements of the destinations are given in the following table:

D1 D2 D3 Supply

S1 8 5 6 120

S2 15 10 12 80

S3 3 9 10 80

Demand 140 80 50

a. Using the a. North-West Corner (NWC) Method, Least Cost Method (LCM), and Vogel’s Approximation (or penalty) Method (VAM, obtain the initial basic

feasible solution,.

b. Formulate it as a Linear Programming Problem.

9. Harley’s Sand and Gravel Pit have contracted to provide topsoil for three residential housing developments. Topsoil can be supplied from three different “farms”

as follows:

Farm Weekly capacity (cubic yards)

A 100

B 200

C 200

Demand for the topsoil generated by the construction projects is:

2
 Project Weekly demand(cubic yards)

1 50

2 150

3 300

The manager of the sand and gravel pit has estimated the cost per cubic yard to ship over each of the possible routes:

From/to Cost per cubic yard to

Project #1 Project #2 Project #3

Farm A Birr4 Birr 2 Birr 8

Farm B 5 1 9

Farm C 7 6 3

a. arrange the information into a transportation table

b. Write the above transportation problem in the form of linear programming problem.
c. Find the feasible solution using North-West Corner (NWC) Method, Least Cost
Method (LCM), and Vogel’s Approximation (or penalty) Method (VAM).

10. A manager has prepared a table that shows the cost of performing each of four jobs by each of four employees. According to this table, Job 1 will cost $15 if

done by Employee A, $20 if it is done by Employee B, and so on. The manager has stated that his goal is to develop a set of job assignments that will minimize the total cost of

getting all four jobs done. It is further required that the jobs be performed simultaneously, thus requiring one job being assigned to each employee. Although the manager

recognizes that this problem can be solved using the simplex routine, he also knows that he can solve the problem by hand using the assignment method.

Job Costs for Each Possible Pairing

Employees

A B C D

1 $15 20 18 24

2 12 17 16 15

Job 3 14 15 19 17

4 11 14 12 13

Required:

a) Formulate a linear Programming problem

b) Which salesperson should be assigned to each region to minimize total time? Identify
the optimal assignments and compute total minimum time. Use the Hungarian Method

11. A firm makes air coolers of three types and markets these under the brand name “Symphony”.

The relevant details are as follows:-

3
 Product A (hrs. / unit) Product B (hrs. / unit) Product C (hrs,/ unit) Total hrs. available

Designing 0 10 20 320

Manufacturing 60 90 120 1600

Painting 30 40 60 1120

Profit $300 $700 $900

Required:

a. Formulate a linear Programming problem

b. What Quantity of each product must be made to maximize the total profit of the firm? Use simple procedure.
12. The Omega pharmaceutical firm has five salespersons, whom the firm wants to assign to five sales regions. Given their various previous contacts, the

salespersons are able to cover the regions in different amounts of time. The amount of time (days) required by each salesperson to cover each city is shown in the following

table.

Required:

a. Formulate a linear Programming problem

b. Which salesperson should be assigned to each region to minimize total time? Identify the optimal assignments and compute total minimum time. Use the

Hungarian Method