OTM – 615 Assignment # 2
Operations Research Due Date: Saturday, October 30, 2021
Question # 1 (30 Points): Allied Auto is an auto part distributor and sells four main Lighting systems
for Honda Civic. These products along with sales price and resources needed to produce one unit of
each product are tabulated in the following Table. Allied Auto has 5,000 hours of labor and 4,600 units
of raw material available. Based on the forecast, Allied Auto believes that in order to meet customer
demands, exactly 950 total products must be produced. Forecast also shows that customers demand for
Indicator lights will be at least 400 units.
Resource Fog Light Headlight Brake Light Indicator Light
Raw Material (units) 2 3 4 7
Hours of Labor (hrs) 3 4 5 6
Sales Price ($) 4 6 7 8
a) (10 Points) Formulate an LP that can be used to maximize Allied Auto sales revenue.
b) (2 Points) Suppose Allied Auto raises the price of Headlight by 50¢ per unit. What is the new
optimal solution to the LP?
c) (2 Points) Suppose the sales price of Fog Light is increased by 60¢ per unit. What is the new
optimal solution to the LP?
d) (2 Points) Suppose the sales price of Brake Light is decreased by 60¢. What is the new optimal
solution to the LP?
e) (4 Points) Suppose that forecast is now updated and a total of 980 units must be produced.
Determine the new optimal z-value.
f) (4 Points) Suppose that due to some delays at the supplier end, now only 4,500 units of raw
material are available. What is the new optimal z-value? What if availability further decreases
to 4,400 units.
g) (6 Points) What is the most that Allied Auto should be willing to pay for an additional unit of
raw material? How about an extra hour of labor?
QUESTION # 2 (30 POINTS): TEMSA, a truck manufacturing company must produce 1,000 trucks.
The company has a product plant each in Bursa, Konya, Istanbul and Izmir. The following table
provides information about the cost of producing one truck at each plant, along with the required raw
material and labor. The labor union requires that at least 400 trucks be produced at Istanbul plant; 3,300
hours of labor and 4,000 units of raw material are available for allocation to the four plants
Plant Cost (In thousand dollars Labor Raw Material
Bursa 15 2 3
Konya 10 3 4
Istanbul 9 4 5
Izmir 7 5 6
a) (10 Points) Formulate an LP whose solution will enable TEMSA to minimize the cost of
producing 1,000 cars.
b) (4 Points) Suppose that 4,100 units of raw material are available. Find the new optimal z-value.
c) (4 Points) Suppose that exactly 950 trucks must be produced. What will be the new optimal z-
value?
d) (4 Points) What is the most that TEMSA should pay for an extra hour of labor?
e) (4 Points) What is the most that TEMSA should pay for an extra unit of raw material?
f) (4 Points) A new customer is willing to purchase 20 Trucks at a price of $25,000 per vehicle.
Should TEMSA fill her order?
QUESTION # 3 (20 Points): Solve the mini case given at the end of Chapter # 3 titled “MOSAIC Tiles
Ltd” and answer all questions given at the end of the case.
QUESTION # 4 (20 Points): Solve the mini case given at the end of Chapter # 3 titled “Julia`s Food
Booth” and answer all questions given at the end of the case.
