Unit 5- linear programing and inventory models

Question 1

objective function; algorithm

Answer 1

is a function (no equal sign) of the profits for the two products written in the form.
_X+_Y

Question 2

profit line

Answer 2

can move throughout the graph using the objective function you ca calculate the profit at a point on the profit line

Question 3

optimazation

Answer 3

solving for the optimal (min. or max.) objective to a set of constraints.

Question 4

objective function formula

Answer 4

200R+100N+50S

Question 5

subject to (constraints)

Answer 5

Constraint 1
100R + 200N + 300S >= 5000
constraint 2
   R <= 25
Constraint 3
   N <= 7
Constraint 4
   S <= 14
non-negativity Constraint 5
   R, N, S ≥ 0

Question 6

Objective function Value

Answer 6

2400

Question 7

Variable value

Answer 7

R=6
N=7
S=10= Reduced cost 7.3

Question 8

Components of Total inventory Costs

Answer 8

Annual Total inventory cost (TIC) = Purchasing costs+ holding costs + Ordering costs.

Question 9

ECONOMIC ORDER QUANTITY

Answer 9

(EOQ) = √2𝐷𝑂 /𝐻
*where 2 is a constant, 𝐷 is the annual demand, 𝑂 is the cost to place an order, 𝐻 is the holding cost in $ per unit per year, P is the purchase price (cost) per unit.

Question 10

Total inventory Cost Formula

Answer 10

D*P+(EOQ/2)H+(DEOQ)O
D=anual demand
H=Holding cost per unit
O=cost to place the order