Chapter 3 Linear Programming Formulation and Applications - PDF

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```					Contents
Chapter 1                                          Chapter 3
Introduction     1                                 Linear Programming: Formulation and
1.1    The Nature of Management Science 2
Applications 54
1.2    An Illustration of the Management Science   3.1    A Case Study: The Super Grain Corp.
Approach: Break-Even Analysis 5                    Advertising-Mix Problem 55
1.3    Some Special Features of This Book 11       3.2    Resource-Allocation Problems 61
1.4    Summary 13                                  3.3    Cost–Benefit–Trade-Off Problems 71
Glossary 14                                        3.4    Mixed Problems 77
Learning Aids for This Chapter in Your MS          3.5    Transportation Problems 85
Courseware 14                                      3.6    Assignment Problems 89
Solved Problem 14                                  3.7    Model Formulation from a Broader
Problems 14                                               Perspective 91
3.8    Summary 93
Glossary 93
Chapter 2                                          Learning Aids for This Chapter in Your MS
Linear Programming: Basic Concepts            17   Courseware 94
2.1    A Case Study: The Wyndor Glass Co.          Solved Problems 94
Product-Mix Problem 18                      Problems 95
2.2    Formulating the Wyndor Problem on a         Case 3-1 Shipping Wood to Market 106
Spreadsheet 21                              Case 3-2 Capacity Concerns 106
2.3    The Mathematical Model in the Spreadsheet   Case 3-3 Fabrics and Fall Fashions 108
26                                          Case 3-4 New Frontiers 110
2.4    The Graphical Method for Solving Two-       Case 3-5 Assigning Students to Schools 111
Variable Problems 28                        Case 3-6 Reclaiming Solid Wastes 112
2.5    Using Excel to Solve Linear Programming     Case 3-7 Project Pickings 113
Problems 32
2.6    A Minimization Example—The Profit &         Chapter 4
The Art of Modeling with Spreadsheets
2.7    Linear Programming from a Broader
Perspective 41
115
2.8    Summary 42                                  4.1    A Case Study: The Everglade Golden Years
Glossary 43                                               Company Cash Flow Problem 116
Learning Aids for This Chapter in Your MS          4.2    Overview of the Process of Modeling with
Solved Problem 44                                  4.3    Some Guidelines for Building “Good”
Case 2-1 Auto Assembly 49                          4.4    Debugging a Spreadsheet Model 132
Case 2-2 Cutting Cafeteria Costs 50                4.5    Summary 135
Case 2-3 Staffing a Call Center 52                 Glossary 136

xix
xx    Contents

Learning Aids for This Chapter in Your MS          Case 6-1   Aiding Allies 214
Courseware 136                                     Case 6-2   Money in Motion 217
Solved Problems 136
Problems 137
Chapter 7
Case 4-1 Prudent Provisions for Pensions 139
Using Binary Integer Programming to
Deal with Yes-or-No Decisions 219
Chapter 5
7.1    A Case Study: The California
What-If Analysis for Linear                               Manufacturing Co. Problem 220
Programming 140                                    7.2    Using BIP for Project Selection: The Tazer
5.1    The Importance of What-If Analysis to              Corp. Problem 226
Managers 141                                7.3    Using BIP for the Selection of Sites for
5.2    Continuing the Wyndor Case Study 143               Emergency Services Facilities: The Caliente
5.3    The Effect of Changes in One Objective             City Problem 229
Function Coefficient 145                    7.4    Using BIP for Crew Scheduling: The
5.4    The Effect of Simultaneous Changes in              Southwestern Airways Problem 231
Objective Function Coefficients 151         7.5    Using Mixed BIP to Deal with Setup Costs
5.5    The Effect of Single Changes in a                  for Initiating Production: The Revised
Constraint 159                                     Wyndor Problem 235
5.6    The Effect of Simultaneous Changes in the   7.6    Summary 241
Constraints 165                             Glossary 241
5.7    Summary 170                                 Learning Aids for This Chapter in Your MS
Glossary 170                                       Courseware 241
Learning Aids for This Chapter in Your MS          Solved Problems 241
Courseware 170                                     Problems 243
Solved Problem 171                                 Case 7-1 Assigning Art 248
Problems 172                                       Case 7-2 Stocking Sets 250
Case 5-1 Selling Soap 178                          Case 7-3 Assigning Students to Schools
Case 5-2 Controlling Air Pollution 179                        (Revisited) 251
Case 5-3 Farm Management 181
Case 5-4 Assigning Students to Schools             Chapter 8
(Revisited) 182
Nonlinear Programming          253
8.1    The Challenges of Nonlinear Programming
Chapter 6
254
Network Optimization Problems           184        8.2    Nonlinear Programming with Decreasing
6.1    Minimum-Cost Flow Problems 185                     Marginal Returns 263
6.2    A Case Study: The BMZ Co. Maximum           8.3    Separable Programming 272
Flow Problem 192                            8.4    Difficult Nonlinear Programming Problems
6.3    Maximum Flow Problems 195                          281
6.4    Shortest Path Problems 198                  8.5    Evolutionary Solver and Genetic
6.5    Summary 208                                        Algorithms 284
Glossary 208                                       8.6    Summary 292
Learning Aids for This Chapter in Your MS          Glossary 293
Courseware 209                                     Learning Aids for This Chapter in Your MS
Solved Problem 209                                 Courseware 293
Problems 210                                       Solved Problem 294
Contents xxi

Problems 294                                          10.2   A Case Study: The Computer Club
Case 8-1 Continuation of the Super Grain Case                Warehouse (CCW) Problem 372
Study 299                                    10.3 Applying Time-Series Forecasting Methods
Case 8-2 Savvy Stock Selection 300                           to the Case Study 377
Case 8-3 International Investments 302                10.4 The Time-Series Forecasting Methods in
Perspective 396
10.5 Causal Forecasting with Linear Regression
Chapter 9                                                    399
Decision Analysis      304                            10.6 Judgmental Forecasting Methods 404
9.1    A Case Study: The Goferbroke Company           10.7 Summary 405
Problem 305                                    Glossary 405
9.2    Decision Criteria 307                          Summary of Key Formulas 407
9.3    Decision Trees 312                             Learning Aids for This Chapter in Your MS
9.4    Sensitivity Analysis with Decision Trees       Courseware 407
315                                            Solved Problem 407
9.5    Checking Whether to Obtain More                Problems 408
Information 320                                Case 10-1 Finagling the Forecasts 416
9.6    Using New Information to Update the
Probabilities 323                              Chapter 11
9.7    Using a Decision Tree to Analyze the           Queueing Models      419
Problem with a Sequence of Decisions
11.1   Elements of a Queueing Model 420
327
11.2   Some Examples of Queueing Systems 426
9.8    Performing Sensitivity Analysis on the
11.3   Measures of Performance for Queueing
Problem with a Sequence of Decisions
Systems 428
333
11.4 A Case Study: The Dupit Corp. Problem
9.9    Using Utilities to Better Reflect the Values
431
of Payoffs 339
11.5 Some Single-Server Queueing Models
9.10 The Practical Application of Decision
434
Analysis 350
11.6 Some Multiple-Server Queueing Models
9.11 Summary 351
443
Glossary 352
11.7 Priority Queueing Models 448
Learning Aids for This Chapter in Your MS
11.8 Some Insights about Designing Queueing
Courseware 353
Systems 454
Solved Problems 353
11.9 Economic Analysis of the Number of
Problems 354
Servers to Provide 458
Case 9-1 Who Wants to Be a Millionaire? 365
11.10 Summary 461
Case 9-2 University Toys and the Business
Glossary 462
Professor Action Figures 365
Key Symbols 463
Learning Aids for This Chapter in Your MS
Case 9-4 Smart Steering Support 368
Courseware 463
Solved Problem 463
Chapter 10                                            Problems 464
Forecasting 370                                       Case 11-1 Queueing Quandary 470
10.1   An Overview of Forecasting Techniques          Case 11-2 Reducing In-Process Inventory 471
371
xxii   Contents

Chapter 12                                          13.4   Cash Flow Management: Revisiting the
Computer Simulation: Basic Concepts                        Everglade Golden Years Company Case
473                                                        Study 533
13.5 Financial Risk Analysis: Revisiting the
12.1   The Essence of Computer Simulation 474              Think-Big Development Co. Problem 538
12.2   A Case Study: Herr Cutter’s Barber Shop      13.6 Revenue Management in the Travel
(Revisited) 486                                     Industry 543
12.3 Analysis of the Case Study 493                 13.7 Choosing the Right Distribution 548
12.4 Outline of a Major Computer Simulation         13.8 Decision Making with Decision Tables
Study 499                                           560
12.5 Summary 503                                    13.9 Summary 568
Glossary 503                                        Glossary 568
Learning Aids for This Chapter in Your MS           Learning Aids for This Chapter in Your MS
Courseware 504                                      Courseware 568
Solved Problem 504                                  Solved Problem 568
Problems 504                                        Problems 569
Case 12-1 Planning Planers 509                      Case 13-1 Action Adventures 574
Case 12-2 Reducing In-Process Inventory             Case 13-2 Pricing under Pressure 575
(Revisited) 510
Appendix A
Chapter 13                                          Using the Solver Table   577
Computer Simulation with Crystal
Appendix B
Ball 511
Tips for Using Microsoft Excel for
13.1     A Case Study: Freddie the Newsboy’s        Modeling 581
Problem 512
13.2     Bidding for a Construction Project: A      Appendix C
Prelude to the Reliable Construction Co.   Partial Answers to Selected Problems
Case Study 522                             589
13.3     Project Management: Revisiting the         Index   593
Reliable Construction Co. Case Study 526
Contents xxiii

Supplements on the CD-ROM                           Learning Aids for This Chapter in Your MS
Courseware
Supplement to Chapter 2: More about the      Problems
Graphical Method for Linear Programming
Supplement to Chapter 5: Reduced Costs
Supplement to Chapter 6: Minimum             Chapter 15
Spanning-Tree Problems                       Transportation and Assignment
Supplement 1 to Chapter 7: Advanced          Problems
Formulation Techniques for Binary Integer
Programming                                  15.1   A Case Study: The P & T Company
Supplement 2 to Chapter 7: Some                     Distribution Problem
Perspectives on Solving Binary Integer       15.2 Characteristics of Transportation Problems
Programming Problems                         15.3 Modeling Variants of Transportation
Supplement to Chapter 9: Decision Criteria          Problems
Supplement to Chapter 10: Time-Series        15.4 Some Other Applications of Variants of
Forecasting with CB Predictor                       Transportation Problems
Supplement to Chapter 11: Additional         15.5 A Case Study: The Texago Corp. Site
Queueing Models                                     Selection Problem
Supplement to Chapter 12: The Inverse        15.6 Characteristics of Assignment Problems
Transformation Method for Generating         15.7 Modeling Variants of Assignment Problems
Random Observations                          15.8 Summary
Supplement to Chapter 13: Optimizing with    Glossary
OptQuest                                     Learning Aids for This Chapter in Your MS
Courseware
Problems
Chapters on the CD-ROM                              Case 15-1 Continuation of the Texago Case
Chapter 14                                                      Study
Solution Concepts for Linear
Programming                                         Chapter 16
14.1   Some Key Facts about Optimal Solutions       PERT/CPM Models for Project
14.2   The Role of Corner Points in Searching for   Management
an Optimal Solution                          16.1   A Case Study: The Reliable Construction
14.3 Solution Concepts for the Simplex Method              Co. Project
14.4 The Simplex Method with Two Decision           16.2 Using a Network to Visually Display
Variables                                           a Project
14.5 The Simplex Method with Three Decision         16.3 Scheduling a Project with PERT/CPM
Variables                                    16.4 Dealing with Uncertain Activity
14.6 The Role of Supplementary Variables                   Durations
14.7 Some Algebraic Details for the Simplex         16.5 Considering Time–Cost Trade-Offs
Method                                       16.6 Scheduling and Controlling Project Costs
14.8 Computer Implementation of the Simplex         16.7 An Evaluation of PERT/CPM from a
Method                                              Managerial Perspective
14.9 The Interior-Point Approach to Solving         16.8 Summary
Linear Programming Problems                  Glossary
14.10 Summary                                       Learning Aids for This Chapter in Your MS
Glossary                                            Courseware
Problems
xxiv Contents

Case 16-1   Steps to Success                         18.7   The EOQ Model with Gradual
Case 16-2   “School’s Out Forever . . . ”                   Replenishment
18.8 Summary
Chapter 17                                           Glossary
Goal Programming                                     Learning Aids for This Chapter in Your MS
Courseware
17.1   A Case Study: The Dewright Co. Goal-          Problems
Programming Problem                           Case 18-1: Brushing Up on Inventory Control
17.2 Weighted Goal Programming
17.3 Preemptive Goal Programming
17.4 Summary                                         Chapter 19
Glossary                                             Inventory Management with Uncertain
Learning Aids for This Chapter in Your MS            Demand
Courseware                                           19.1   A Case Study for Perishable Products:
Problems                                                    Freddie the Newsboy’s Problem
Case 17-1 A Cure for Cuba                            19.2 An Inventory Model for PerishableProducts
Case 17-2 Remembering September 11                   19.3 A Case Study for Stable Products: The Niko
Camera Corp. Problem
Chapter 18                                           19.4 The Management Science Team’s Analysis
Inventory Management with Known                             of the Case Study
Demand                                               19.5 A Continuous-Review Inventory Model for
Stable Products
18.1   A Case Study: The Atlantic Coast Tire Corp.   19.6 Larger Inventory Systems in Practice
(ACT) Problem                                 19.7 Summary
18.2   Cost Components of Inventory Models           Glossary
18.3   The Basic Economic Order Quantity (EOQ)       Learning Aids for This Chapter in Your MS
Model                                         Courseware
18.4   The Optimal Inventory Policy for the Basic    Problems
EOQ Model                                     Case 19-1: TNT: Tackling Newsboy’sTeachings
18.5   The EOQ Model with Planned Shortages          Case 19-2: Jettisoning Surplus Stock
18.6   The EOQ Model with Quantity Discounts

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