2 -1 CHAPTER 2 LINEAR PROGRAMMING: BASIC CONCEPTS Review Questions 2.1-1 Ponderosa Industrial uses linear programming monthly to guide the product-mix decision. 2.1-2 Overall profitability has increased by 20%. Better utilization of raw material, capital equipment, and personnel also resulted. 2.1-3 The goal was to improve the utilization of reservation personnel by matching work schedules to customer needs. 2.1-4 United Airlines saved more than $6 million annually in direct salary and benefit costs. Customer service also improved and workloads were reduced for support staff. 2.1-5 The SDM system is used to coordinate the supply, distribution and marketing of each of Citgo’s major products throughout the United States. 2.1-6 Citgo saved about $14 million annually in interest expenses. Improvements in coordination, pricing, and purchasing decisions added at least $2.5 million more to annual profits. 2.2-1 They provide the highest quality available in the industry for the most discriminating buyers. 2.2-2 1) Should the company launch the two new products? 2) What should be the product mix for the two new products? 2.2-3 The group was asked to analyze product mix. 2.2-4 Which combination of production rates for the two new products would maximize the total profit from both of them. 2.2-5 1) available production capacity in each of the plants 2) how much of the production capacity in each plant would be needed by each product 3) profitability of each product 2.3-1 1) What are the decisions to be made? 2) What are the constraints on these decisions? 3) What is the overall measure of performance for these decisions? 2 -2 2.3-2 When formulating a linear programming model on a spreadsheet, the cells sho...
