Date: 16/03/2023

Time: 09 am – 10.30 am
Business Optimization
Number of pages: 2
Total marks: 100
Midterm Exam
Solutions

Question 1 (25 points)

1. Let : Xi be the quantity to produce of product i with i=1 for P1, 2 for P2, and 3 for P3.(3
points)
Max (2point)
s.t. (2point)
5(2point)

4(2point)

, (1point)

2. Let : X1 be the quantity to produce of product 1

X2 be the quantity to produce of product 2
X3 be the number of units to destroy of product 3(2 points)
X4 be the number of units to recycle of product 3(2 points)
Max (2 points)
s.t. (2 points)
5(2 points)

4(1 point)

(2 points)
,,

Question 2 (20 points)

1.
Max
s.t.

1
 ,
Constraint 1 : (0,5), (15,0)
Constraint 2 : (10,0)
Constraint 3 : (0,4)
Z1 : = 3
(0,1) ; (3,0)
Z2 : = 6
(0,2) ; (6,0)

Point X1 X2 Z
O 0 0 0
G 0 4 12
D 3 4 15
C 10 1.666666667 15
E 10 0 10

Before quitting the feasible region, the Z line touches both points D and C simultaneously.
Therefore, the segment [D,C] is optimal and the problem has infinite solutions giving the optimal
Z value of 15.
Axis: 1 point, C1: 2points, C2: 2 points, C3: 2 points, Feasibleregion: 2 points, Z1: 2 points,
Z2: 2 points, Optimal solution: 3 points

2
 2. When replacing both points D and C in constraint 1, we obtain the following
Point D: (1 point)
Point C : (1 point)
Therefore, constraint 1 is binding, as its slack variable is equal to zero for both points D and
C(2 points)
Question 3 (25 points)
Standard form:(1 point)

Max
s.t.

2 -1 1 0 0 0 R.H.S R.T

4 points 0 2 1 0 1 0 0 10 5
0 1 2 -2 0 1 0 20 20
0 -5 1 2 0 0 1 0 -
Zj 0 0 0 0 0 0 0
Cj-Zj 2 -1 1 0 0 0 -
Corner point (0, 0, 0)(1 point)
2 -1 1 0 0 0 R.H.S R.T

6 points 2 1 1/2 0 ½ 0 0 5 -
0 0 3/2 -2 -1/2 1 0 15 -
0 0 7/2 2 5/2 0 1 25 12.5
Zj 2 1 0 1 0 0 10
Cj-Zj 0 0 1 -1 0 0 -
Corner point (5, 0, 0)(1 point)
2 -1 1 0 0 0 R.H.S

2 1 1/2 0 1/2 0 0 5
6 points 0 0 5 0 2 1 1 40
1 0 7/4 1 5/4 0 1/2 12.5
Zj 2 11/4 0 9/4 0 1/2 22.5
Cj-Zj 0 -15/4 0 -9/4 0 -1/2 -
Corner point (5, 0, 12.5)(1 point)

3
 This tableau is optimal as we are maximizing and all Cj-Zj row values are zero or negative.(2
points)
Optimal solution: X1*=5, X2*=S1*=S3*=0, X3*=12.5, S2*=40, Z*=22.5(3 points)
Question 4 (15 points)
1. It is a maximization problem.In the optimal tableau, allCj-Zj row values are zero or
negative.(3 points)
2.
4 8 0 0 0 R.H.S
X1 X2 S1 S2 S3
4 X1 1 0 1.5 -0.25 0 3
8 X2 0 1 -0.5 0.25 0 7
0 S3 0 0 -4 0.5 1 8
Zj 4 8 2 1 0 68
Cj-Zj 0 0 -2 -1 0 -
(3 points) E1 E2 Y1 Y2 Y3 W*
0 0 2 1 0 68

E1*= E2*= Y3*=0, Y1*=2, Y2*=1, W*=68(1 point)

3. For an additional unit of resource 1, I am willing to pay up to 2 dinars, which is the
shadow price of the resource.(3 points)
4. No, I will not accept the offer because it is beyond the resource’s shadow price. Thus, for
one more unit of resource 2, we are willing to pay up to 1 dinars. Therefore, for 3
additional units of resource 2, we are willing to pay up to 3 dinars which is less than 5
dinars.(5 points)

Question 5 (15 points)

There are two ways to provide the dual of this LP.

1st method:

Max
s.t.

4
2nd method:
Equivalent form

Min
s.t.

Max
s.t.

Objective function: 2 points, C1: 2 points, C2: 2 points, C3: 2 points, Y1: 2 points, Y2: 2
points, Y3: 2 points, Equivalent form: 1 point

(If the student did not change C2 to a constraint of the type ≥, then Y2≤0 will take 3 points)