Problem 3-31 (Algorithmic)

Gulf Coast Electronics is ready to award contracts to suppliers for providing reservoir capacitors for use in its electronic devices. For the past several years, Gulf Coast Electronics has relied on two suppliers for its reservoir capacitors: Able Controls and Lyshenko Industries. A new firm, Boston Components, has inquired into the possibility of providing a portion of the reservoir capacitors needed by Gulf Coast. The quality of products provided by Lyshenko Industries has been extremely high; in fact, only 0.6% of capacitors provided by Lyshenko had to be discarded because of quality problems. Able Controls has also had a high quality level historically, producing an average of only 2% unacceptable capacitors. Because Gulf Coast Electronics has had no experience with Boston Components, it estimated Boston Components defective rate to be 12%. Gulf Coast would like to determine how many reservoir capacitors should be ordered from each firm to obtain 76000 acceptable-quality capacitors to use in its electronic devices. To ensure that Boston Components will receive some of the contract, management specified that the volume of reservoir capacitors awarded to Boston Components must be at least 12% of the volume given to Able Controls. In addition, the total volume assigned to Boston Components, Able Controls, and Lyshenko Industries should not exceed 32000, 49500, and 50500 capacitors, respectively. Because of Gulf Coasts long-term relationship with Lyshenko Industries, management also specified that at least 32000 reports should be ordered from Lyshenko. The cost per capacitor is $2.35 for Boston Components, $2.55 for Able Controls, and $2.8 for Lyshenko Industries.

1. Formulate and solve a linear program for determining how many reservoir capacitors should be ordered from each supplier to minimize the total cost of obtaining 75,000 acceptable-quality reservoir capacitors. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. Enter "0" if your answer is zero. If the constant is "1" it must be entered in the box. Let B = number of capacitors ordered from Boston Components Let A = number of capacitors ordered from Able Controls Let L = number of capacitors ordered from Lyshenko Industries

Min	B "2.35"	+	A "2.55"	+	L "2.8"
s.t.
	"1"B							Boston
			A "1"					Able
					"1"L			Lyshenko
	B ".88"	+	A	+	L	=		# useful capacitors
	B "1"	+	A "-0.12"				0	Boston - Able %
					L			Minimum Lyshenko
B, A, L 0

2. Round your answers to the nearest whole number.

Optimal Solution:
B
A
L

4. Suppose that the quality level for reservoir capacitors supplied by Boston Components is much better than estimated. What effect, if any, would this quality level have? If the quality of reservoir capacitors supplied by Boston Components is much better than expected the optimal solution may change. For example, if Boston Components reduced their defect rate from 12% to 2%, the new optimal solution would increase the number of reservoir capacitors given to Boston Components to____ .
5. Suppose that management is willing to reconsider their requirement that at least 30,000 capacitors must be ordered from Lyshenko Industries. What effect, if any, would this consideration have? If required, round your answer to the nearest cent. If management removes or reduces the requirement that Lyshenko Industries be ordered at least 30,000 reservoir capacitors the cost will decrease by $____ per unit decreased.