Problems 287
26. The Sea Wharf Restaurant would like to determine the best way to allocate a monthly
advertising budget of $1000 between newspaper advertising and radio advertising. Man-
agement decided that at least 25% of the budget must be spent on each type of media, and
that the amount of money spent on local newspaper advertising must be at least twice the
amount spent on radio advertising. A marketing consultant developed an index that mea-
sures audience exposure per dollar of advertising on a scale from 0 to 100, with higher
values implying greater audience exposure. If the value of the index for local newspaper
advertising is 50 and the value of the index for spot radio advertising is 80, how should the
restaurant allocate its advertising budget in order to maximize the value of total audience
exposure?
a. Formulate a linear programming model that can be used to determine how the restau-
rant should allocate its advertising budget in order to maximize the value of total
audience exposure.
b. Solve the problem using the graphical solution procedure.
27. Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios de-
signed to meet the specific risk tolerances of its clients. A client who contacted B&R this
past week has a maximum of $50,000 to invest. B&R’s investment advisor decides to rec-
ommend a portfolio consisting of two investment funds: an Internet fund and a Blue Chip
fund. The Internet fund has a projected annual return of 12%, while the Blue Chip fund
has a projected annual return of 9%. The investment advisor requires that at most $35,000
of the client’s funds should be invested in the Internet fund. B&R services include a risk
rating for each investment alternative. The Internet fund, which is the more risky of the two
investment alternatives, has a risk rating of 6 per thousand dollars invested. The Blue Chip
fund has a risk rating of 4 per thousand dollars invested. For example, if $10,000 is in-
vested in each of the two investment funds, B&R’s risk rating for the portfolio would be
6(10) 4(10) 100. Finally, B&R developed a questionnaire to measure each client’s
risk tolerance. Based on the responses, each client is classified as a conservative, moder-
ate, or aggressive investor. Suppose that the questionnaire results classified the current
client as a moderate investor. B&R recommends that a client who is a moderate investor
limit his or her portfolio to a maximum risk rating of 240.
a. What is the recommended investment portfolio for this client? What is the annual
return for the portfolio?
b. Suppose that a second client with $50,000 to invest has been classified as an aggres-
sive investor. B&R recommends that the maximum portfolio risk rating for an
aggressive investor is 320. What is the recommended investment portfolio for this ag-
gressive investor? Discuss what happens to the portfolio under the aggressive investor
strategy.
c. Suppose that a third client with $50,000 to invest has been classified as a conservative
investor. B&R recommends that the maximum portfolio risk rating for a conservative
investor is 160. Develop the recommended investment portfolio for the conservative in-
vestor. Discuss the interpretation of the slack variable for the total investment fund
constraint.
28. Tom’s, Inc., produces various Mexican food products and sells them to Western Foods, a
chain of grocery stores located in Texas and New Mexico. Tom’s, Inc., makes two salsa
products: Western Foods Salsa and Mexico City Salsa. Essentially, the two products have
different blends of whole tomatoes, tomato sauce, and tomato paste. The Western Foods
Salsa is a blend of 50% whole tomatoes, 30% tomato sauce, and 20% tomato paste. The
Mexico City Salsa, which has a thicker and chunkier consistency, consists of 70% whole
tomatoes, 10% tomato sauce, and 20% tomato paste. Each jar of salsa produced weighs
10 ounces. For the current production period, Tom’s, Inc., can purchase up to 280 pounds
of whole tomatoes, 130 pounds of tomato sauce, and 100 pounds of tomato paste; the price
288 Chapter 7 Introduction to Linear Programming
per pound for these ingredients is $0.96, $0.64, and $0.56, respectively. The cost of the
spices and the other ingredients is approximately $0.10 per jar. Tom’s, Inc., buys empty
glass jars for $0.02 each, and labeling and filling costs are estimated to be $0.03 for each
jar of salsa produced. Tom’s contract with Western Foods results in sales revenue of $1.64
for each jar of Western Foods Salsa and $1.93 for each jar of Mexico City Salsa.
a. Develop a linear programming model that will enable Tom’s to determine the mix of
salsa products that will maximize the total profit contribution.
b. Find the optimal solution.
29. AutoIgnite produces electronic ignition systems for automobiles at a plant in Cleveland,
Ohio. Each ignition system is assembled from two components produced at AutoIgnite’s
plants in Buffalo, New York, and Dayton, Ohio. The Buffalo plant can produce 2000 units
of component 1, 1000 units of component 2, or any combination of the two components each
day. For instance, 60% of Buffalo’s production time could be used to produce component 1
and 40% of Buffalo’s production time could be used to produce component 2; in this case,
the Buffalo plant would be able to produce 0.6(2000) 1200 units of component 1 each day
and 0.4(1000) 400 units of component 2 each day. The Dayton plant can produce 600 units
of component 1, 1400 units of component 2, or any combination of the two components each
day. At the end of each day, the component production at Buffalo and Dayton is sent to
Cleveland for assembly of the ignition systems on the following workday.
a. Formulate a linear programming model that can be used to develop a daily production
schedule for the Buffalo and Dayton plants that will maximize daily production of
ignition systems at Cleveland.
b. Find the optimal solution.
30. A financial advisor at Diehl Investments identified two companies that are likely candi-
dates for a takeover in the near future. Eastern Cable is a leading manufacturer of flexible
cable systems used in the construction industry, and ComSwitch is a new firm specializ-
ing in digital switching systems. Eastern Cable is currently trading for $40 per share, and
ComSwitch is currently trading for $25 per share. If the takeovers occur, the financial
advisor estimates that the price of Eastern Cable will go to $55 per share and ComSwitch
will go to $43 per share. At this point in time, the financial advisor has identified Com-
Switch as the higher-risk alternative. Assume that a client indicated a willingness to invest
a maximum of $50,000 in the two companies. The client wants to invest at least $15,000
in Eastern Cable and at least $10,000 in ComSwitch. Because of the higher risk associated
with ComSwitch, the financial advisor has recommended that at most $25,000 should be
invested in ComSwitch.
a. Formulate a linear programming model that can be used to determine the number of
shares of Eastern Cable and the number of shares of ComSwitch that will meet the in-
vestment constraints and maximize the total return for the investment.
b. Graph the feasible region.
c. Determine the coordinates of each extreme point.
d. Find the optimal solution.
31. Consider the following linear program:
SELF test
Min 3A 4B
s.t.
1A 3B 6
1A 1B 4
A, B 0
Identify the feasible region and find the optimal solution using the graphical solution pro-
cedure. What is the value of the objective function?
Problems 289
32. Identify the three extreme-point solutions for the M&D Chemicals problem (see Section 7.5).
Identify the value of the objective function and the values of the slack and surplus variables
at each extreme point.
33. Consider the following linear programming problem:
Min A 2B
s.t.
A 4B 21
2A B 7
3A 1.5B 21
2A 6B 0
A, B 0
a. Find the optimal solution using the graphical solution procedure and the value of the
objective function.
b. Determine the amount of slack or surplus for each constraint.
c. Suppose the objective function is changed to max 5A 2B. Find the optimal solution
and the value of the objective function.
34. Consider the following linear program:
SELF test Min 2A 2B
s.t.
1A 3B 12
3A 1B 13
1A 1B 3
A, B 0
a. Show the feasible region.
b. What are the extreme points of the feasible region?
c. Find the optimal solution using the graphical solution procedure.
35. For the linear program
SELF test
Min 6A 4B
s.t.
2A 1B 12
1A 1B 10
1B 4
A, B 0
a. Write the problem in standard form.
b. Solve the problem using the graphical solution procedure.
c. What are the values of the slack and surplus variables?
36. As part of a quality improvement initiative, Consolidated Electronics employees complete
a three-day training program on teaming and a two-day training program on problem solv-
ing. The manager of quality improvement has requested that at least 8 training programs
on teaming and at least 10 training programs on problem solving be offered during the next
six months. In addition, senior-level management has specified that at least 25 training
programs must be offered during this period. Consolidated Electronics uses a consultant
to teach the training programs. During the next quarter, the consultant has 84 days of
290 Chapter 7 Introduction to Linear Programming
training time available. Each training program on teaming costs $10,000 and each training
program on problem solving costs $8000.
a. Formulate a linear programming model that can be used to determine the number of
training programs on teaming and the number of training programs on problem solv-
ing that should be offered in order to minimize total cost.
b. Graph the feasible region.
c. Determine the coordinates of each extreme point.
d. Solve for the minimum-cost solution.
37. The New England Cheese Company produces two cheese spreads by blending mild ched-
dar cheese with extra sharp cheddar cheese. The cheese spreads are packaged in 12-ounce
containers, which are then sold to distributors throughout the Northeast. The Regular
blend contains 80% mild cheddar and 20% extra sharp, and the Zesty blend contains 60%
mild cheddar and 40% extra sharp. This year, a local dairy cooperative offered to provide
up to 8100 pounds of mild cheddar cheese for $1.20 per pound and up to 3000 pounds of
extra sharp cheddar cheese for $1.40 per pound. The cost to blend and package the cheese
spreads, excluding the cost of the cheese, is $0.20 per container. If each container of Reg-
ular is sold for $1.95 and each container of Zesty is sold for $2.20, how many containers
of Regular and Zesty should New England Cheese produce?
38. Applied Technology, Inc. (ATI) produces bicycle frames using two fiberglass materials that
improve the strength-to-weight ratio of the frames. The cost of the standard-grade material
is $7.50 per yard and the cost of the professional-grade material is $9.00 per yard. The
standard- and professional-grade materials contain different amounts of fiberglass, carbon
fiber, and Kevlar, as shown in the following table:
Standard Grade Professional Grade
Fiberglass 84% 58%
Carbon fiber 10% 30%
Kevlar 6% 12%
ATI signed a contract with a bicycle manufacturer to produce a new frame with a carbon
fiber content of at least 20% and a Kevlar content of not greater than 10%. To meet the
required weight specification, a total of 30 yards of material must be used for each
frame.
a. Formulate a linear program to determine the number of yards of each grade of fiber-
glass material that ATI should use in each frame in order to minimize total cost. De-
fine the decision variables and indicate the purpose of each constraint.
b. Use the graphical solution procedure to determine the feasible region. What are the
coordinates of the extreme points?
c. Compute the total cost at each extreme point. What is the optimal solution?
d. The distributor of the fiberglass material is currently overstocked with the professional-
grade material. To reduce inventory, the distributor offered ATI the opportunity to pur-
chase the professional-grade material for $8 per yard. Will the optimal solution change?
e. Suppose that the distributor further lowers the price of the professional-grade
material to $7.40 per yard. Will the optimal solution change? What effect would an
even lower price for the professional-grade material have on the optimal solution?
Explain.
39. Innis Investments manages funds for a number of companies and wealthy clients. The in-
vestment strategy is tailored to each client’s needs. For a new client, Innis has been autho-
rized to invest up to $1.2 million in two investment funds: a stock fund and a money market
