Topic 3
Section outline
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Now that we have been exposed to the wonderful application of linear programming. We will delve deeper into goal programming and integer linear programming. The learning outcomes are as follows:
1. To model a real-world problem into a goal programming model with different goals and priority levels.
2. To present a real-world problem as a linear programming model.
3. To interpret the sensitivity report generated by computer software.
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Consider the in-class exercise.
M&D chemicals produces two products that are sold as raw materials. Management has specified that the combination production for product 1 and 2 must total at least 350 gallons. Separately, a major customer’s order for 125 gallons of product 1 must also be satisfied. Product 1 requires 2 hours of processing time per gallon while product 2 requires 1 hour of processing time per gallon, and for the coming month, 600 hours of processing time are available. M&D’s objective is to satisfy the above requirements at a minimum total production cost. Production costs are $x per gallon for product 1 and $y per gallon for product 2.
Now set a range of values for x and y; generate a series of sensitivity reports and analyze the trend from your values entered. What are some of the conjectures you would derive?
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