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Lecture

BDM (Y. Levin)

4 Pages
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Department
Commerce
Course Code
COMM 163
Professor
Yuri Levin

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BDM Sept 26th Notebook: 163 Created: 26/09/2011 1:02 PM Updated: 26/09/2011 2:20 PM Somebody is trying to send you 2 more assembly hours for $8; would you buy them or not? - allowable increase is 3.333 so you can apply concept of shadow price - profit will increase by the shadow price * 2, profit will increase by 2.85*2 =~5, which is less than $8 - no, because the allowable increase for assembly Would you get 3 more grinder hours for $150 total? - cannot analyze what happens with 3 more hours because allowable increase is 2.5 - but what happens with 2.5 more grinder hours - profit will increase by 2.5*67 = $167; thus you should get the 3 grinder hours, because with 3 hours we can do at least as good as with 2.5 hours, so YES we will purchase the 3 hours Looking at LPPractice1.pdf, problem 2 Product mix LP models 1. Start with picture company with limited resources is trying to maximize profits by running 2 process, they make 2 drugs - drug 1: Rive X, drug 2: Drumad, 3rd drug is mix of both: Duovir Decisions: X (process 1), Y (process 2), Z (combining process to make Duovir Rive X for selling: 3X+5Y(-0.7Z) Dumad for selling: 4X+2Y(-0.3Z) ---OBJECTIVE Max profit; Revenue - cost Reveue = 22.5[3X+5Y(-0.7Z)] + 18.75[4X+2Y(-0.3Z)] + 26Z Cost = 50.25X+45Y+1.3Z NOTE: Don't combine units and variable for simplification; maintain robustness of model Constraints: 1. 150 >= X + 1.25 Y (Reactor time) 2. 160 >= 0.5X+0.4Y+0.8Z (Blending time) Amount sold >=o for each product a. 3X+5Y-0.7Z >= 0 (Rive X) b. 4X+2Y-0.3Z>=0 c. Z>=0 Non-negativity: X,Y,Z>= 0 Multiperiod production N time interval (period 1, period 2, ▯. Period n) Things may change from 1 time period to another (in each time period Di = demand in per.i Ci
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