I.

OPTIMIZING MODELLING

1. Define the objective goal and all relevant constraints.

Objective Goal :
Minimize Cost: 7.500 X1 + 7.500 X2 + 4.000 X3 + 4.000 X4

Constraints:
X1 + X3 >= 1.500
X2 + X4 >= 2.000
-0,15 X1 + 0,05 X3 <= 0 … (1)
0.10 X2 – 0,10 X4 >=0 … (2)

(1) 45% of each Kg must be ingredients 1 so

0,45 (X1 + X3) = Minimum amount of Ingredient 1 Allowed
0,30 X1 + 0,50 X3 = Amount of Ingredient 1 in Pastry Flour
So 0,30 X1 + 0,50 X3 <= 0,45 X1 + 0,45 X3
Hence -0,15 X1 + 0,05 X3 <= 0

(2) 55% of each Kg must be ingredients 2 so

0,55 (X2 + X4) = Minimum amount of Ingredient 2 Required
0,65 X2 + 0,45 X4 = Amount of Ingredient 2 in Noodle Flour
So 0,65 X2 + 0,45 X4 >= 0,55 X2 + 0,55 X4
Hence 0,10 X2 – 0,10 X4 >= 0

Key:
X1 Buckwheat for Pastry Flour
X2 Buckwheat for Noodle flour
X3 Corn for Pastry Flour
X4 Corn for Noodle Flour

2. Present results taken from QM software or Solver.

3. What is the estimated total cost to produce the tea products?

Estimated total cost to produce the tea products are IDR18.812.500,-

4. Based on the sensitivity report, how much the upper and lower bound for each
product that can change the optimal solutions. Explain your answer.
 Based on the sensitivity report, the upper bound and lower bound for product
X1: Upper = Infinity Lower = 3.500
X2: Upper = Infinity Lower = 3.500
X3: Upper = 3.500 Lower = 6.500
X4: Upper = 3.500 Lower = 11.500

Based on the calculation above, we can see that there is an allowable increase in
variable X3 and X4 to maximum at 7.500 while they allowed to decrease by -3.000 for
X3 and -7.500 for X4 without changing the cost. If there is a changes between both of
the Allowable Increase or Allowable Decrease will cause changes in the cost itself.

5. Provide summary and suggestions for the firm.

Based on the calculation using the solver software, they need 375 kg Buckwheat for
Pastry Flour, 1.000 kg Buckwheat for Noodle flour, 1.125 kg Corn for Pastry Flour
and 1.000 kg Corn for Noodle Flour. Reduced cost on this calculation is 0 which is
good for the firm. The firm also can change the production formula as they wanted to
as long as they fulfil the upper and lower boundaries. Without changing any variables
between the boundaries there will be no changes in the cost.
 II. TRANSPORTATION/ASSIGNMENT MODELLING

1. Formulate as a linear programming (LP) function.

Jakarta Bandung Semarang Surabaya Supply (Raw

Materials)
Merapi Steel 100 40 82 30 55
Ambara Beton 52 30 60 70 45
Srikandi Railway 20 80 12 90 70
Demand (Raw Material) 50 40 20 30

Let Xa.b where a = 1: Merapi Steel; 2: Ambara Beton; 3: Srikandi Railway

b = 1: Jakarta; 2: Bandung; 3: Semarang; 4: Surabaya

Objectives:
Minimizing Total Cost: 100 X1.1 + 40 X1.2 + 82 X1.3 + 30 X1.4 + 52 X2.1 + 30 X2.2 + 60
X2.3 + 70 X2.4 + 20 X3.1 + 80 X3.2 + 12 X3.3 + 90 X3.4

Constraints:
X1.1 + X1.2 + X1.3 + X1.4 <= 55 Merapi Steel Supply
X2.1 + X2.2 + X2.3 + X2.4 <= 45 Ambara Beton Supply
X3.1 + X3.2 + X3.3 + X3.4 <=70 Srikandi Railway Supply
X1.1 + X2.1 + X3.1 = 50 Jakarta Demand
X1.2 + x2.2 + X3.2 = 40 Bandung Demand
X1.3 + X2.3 + X3.3 = 20 Semarang Demand
X1.4 + X2.4 + X3.4 = 30 Surabaya Demand
Xa.b >= 0 For All

2. Solve the problem using QM for Windows, show your step-by-step process and
interpret your findings
 Based on the case above, PT. Kereta Cepat Indonesia required a raw materials for
their needs from Merapi Steel, Abara Beton and Srikandi Railway to several location located
in Jakarta, Bandung, Semarang, and Surabaya. Based on the supply and demand that given.
Merapi steel will supply to Surabaya with 30, Ambara Beton will supply to Bandung with 40
raw material, while srikandi railway will supply to Jakarta and Semarang with 50 and 20
respectively. The total cost is 3340.
While from the sensitivity report there are allowance increase in Merapi Steel Surabaya,
Ambara Beton Jakarta and Bandung, Srikandi Railway Jakarta and Semarang. While all of
them have allowance decrease (as stated in the table above).
From the answer report there is non-binding status. This occurs when supply and demand
does not equal. There’s difference in Merapi Steel with 25 and Ambara Beton with 5 raw
materials.
III. INVENTORY CONTROL

1. Calculate the EOQ.

Based on calculation above, the number of EOQ is 449

2. Based on your answer in part a, calculate the average inventory. How much is the
annual inventory holding cost?

The average inventory is $224,50 and the annual holding cost is $112,25.

3. How many orders should be made per year to minimize the cost? How much is the
annual ordering cost?
 The number of orders should be made per year is 6,24 times with the annual ordering
cost $112,25

4. Based on your answer in part a, how much is the total inventory cost (including the
purchase cost)?
Based on table, the total inventory cost is $28.224,50

5. Calculate the time between orders

(365 days / 6,24) – Lead Time = 55,49 days

6. Calculate the ROP.

Based on calculation above, the number of ROP is 34.

4.

The picture above shown the unweighted super matrix of the problem in this model which is
house selection between house A dan house B. the results of the unweighted super matrix
didn’t change from the original matrix value in the judgment of super decision.

The picture above shown the weighted super matrix of the problem in this model which is
house selection between house A dan house B. the results of the weighted super matrix didn’t
change from the original matrix value in the judgment of super decision.

The picture above shown the limit matrix of the AHP problem. It shows that the goalnode
value with alternative house A and house b is calculated by respective 0.312113 and
0.187887.

The synthesized result of the AHP solution using Super Decision shown that House A is the
most ideals house to choose by overall. The raw number of 0.312113 is coming from the limit
matrix that was calculated by the super decision program.
5. from the question, we know that:
P(Bekasi) = 65% = 0.65
P(Surabaya) = 35% = 0.35
P(Bad|Bekasi) = 12% = 0.12
P(Bad|Surabaya) = 6% = 0.06
Question:
a. P(Bekasi|Bad)?
b. P(Surabaya|Bad)?

Answer:
P ( Bad|Bekasi ) P ( Bekasi )
a. P ( Bekasi|Bad )=
P ( Bad|Bekasi ) P ( Bekasi ) + P ( Bad|Surabaya ) P ( Surabaya )
(0.12)(0.65)
P ( Bekasi|Bad )=
(0.12) ( 0.65 ) +(0.06)(0.35)
0.078
P ( Bekasi|Bad )= =0.7 9=79 %
0.099
P ( Bad|Surabaya ) P ( Surabaya )
b. P ( Surabaya|Bad )=
P ( Bad|Bekasi ) P ( Bekasi )+ P ( Bad|Surabaya ) P ( Surabaya )
(0.06)(0.35)
P ( Surabaya|Bad )=
(0.12) ( 0.65 ) +(0.06)(0.35)
0.021
P ( Surabaya|Bad )= =0.21=21 %
0.099
c.
6.

a. To minimize the driving time of John Legend to his office in NYC, John Legend could use
the Main Road with a risk of 60% that there will be traffic jam in the way, if there are no
traffic jam in the way, John Legend could reach his office in the shortest time of 20 Minutes.
b. To Maximize John Legend utility in driving time, he will use the Toll Road because with
the 60% chance of having a traffic jam in the main road could make the overall utilization of
the driving time lower than the utilization in the toll road.
c. Based on the graph below, John Legend is a risk avoider because he would rather avoid the
main road rather than taking it.