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vi CONTENTS

Case Problem 1 Workload Balancing 76 4.5 Financial Applications 168
Case Problem 2 Production Strategy 77 Portfolio Selection 170
Case Problem 3 Blending 78 Financial Planning 174
Appendix 2.1 Solving Linear Programmes With Excel 79 Revenue Management 178
Appendix 2.2 Solving Linear Programmes With the 4.6 Data Envelopment Analysis 182
Management Scientist 82
Summary 190
Problems 191
3 Linear Programming: Sensitivity Case Problem 1 Planning an Advertising
Analysis and Interpretation of Campaign 200
Case Problem 2 Phoenix Computer 202
Solution 85
Case Problem 3 Textile Mill Scheduling 202
3.1 Introduction to Sensitivity Analysis 86 Case Problem 4 Workforce Scheduling 204
Case Problem 5 Cinergy Coal Allocation 205
3.2 Graphical Sensitivity Analysis 88
Appendix 4.1 Excel Solution of Hewlitt Corporation
Objective Function Coefficients 88
Financial Planning Problem 207
Right-Hand Sides 93
3.3 Sensitivity Analysis: Computer Solution 97
Interpretation of Computer Output 97
5 Linear Programming: The
Simultaneous Changes 99
Interpretation of Computer Output – A Second Simplex Method 211
Example 101
5.1 An Algebraic Overview of the Simplex
Cautionary Note on the Interpretation of Dual
Method 212
Prices 104
Algebraic Properties of the Simplex
3.4 More than Two Decision Variables 105 Method 213
The Modified GulfGolf Problem 106 Determining a Basic Solution 213
The Kenya Cattle Company Problem 109 Basic Feasible Solution 214
Formulation of the KCC Problem 111
5.2 Tableau Form 216
Computer Solution and Interpretation for the KCC
Problem 112 5.3 Setting Up the Initial Simplex
Tableau 217
3.5 The Taiwan Electronic Communications (TEC)
Problem 115 5.4 Improving the Solution 218
Problem Formulation 116 5.5 Calculating the Next Tableau 222
Computer Solution and Interpretation 117 Interpreting the Results of an Iteration 224
Summary 121 Moving Toward a Better Solution 225
Worked Example 121 Interpreting the Optimal Solution 228
Problems 123 Summary of the Simplex Method 228
Case Problem 1 Product Mix 134 5.6 Tableau Form: The General Case 230
Case Problem 2 Investment Strategy 135 Greater-Than-or-Equal-to Constraints (‡) 230
Case Problem 3 Truck Leasing Strategy 136 Equality Constraints 234
Eliminating Negative Right-Hand Side
4 Linear Programming Values 235
Summary of the Steps to Create Tableau
Applications 137
Form 236
4.1 The Process of Problem Formulation 138 5.7 Solving a Minimization Problem 237
4.2 Production Management Applications 140 5.8 Special Cases 239
Make-or-Buy Decisions 140 Infeasibility 239
Production Scheduling 143 Unbounded Problems 240
Workforce Assignment 150 Alternative Optimal Solutions 242
4.3 Blending, Diet and Feed-Mix Problems 156 Degeneracy 243
4.4 Marketing and Media Applications 163 Summary 244
Media Selection 163 Worked Example 245
Marketing Research 166 Problems 248

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