WAYNE STATE UNIVERSITY

Ph.D. Preliminary Examination June 2013 (11:00 am to 4:00 pm)

Candidate Name: ________________________
Answer ALL Questions
1- Sensitivity Analysis (20 points)
The Whitt Window Company is a company with only three employees which makes
two different kinds of hand-crafted windows: a wood-framed and an aluminumframed window. They earn $60 profit for each wood-framed window and $30 profit
for each aluminum-framed window. Doug makes wood frames and can make 6 per
day. Linda makes the aluminum frames and can make 4 per day. Bob forms and
cuts the glass and can make 48 square feet of glass per day. Each wood-framed
window uses 6 square feet of glass of glass and each aluminum-framed window
uses 8 square feet of glass.
a. (2 points) Formulate a linear programming model for this problem.
b. (2 points) Use the graphical method to solve the problem.
c. (3 points) Find the range for the profit from aluminum-framed window for which
the current solution will remain optimal.
d. (3 points)
Bob may reduce his working hours or stay for overtime to
decrease/increase the available glass per day. Find the range for available glass
(in square feet) that will keep the same optimal solution mix.
e. (2 points) Bob is willing to stay for overtime. What is the maximum amount
that you would be willing to pay for an hour given that Bob can make 6 square
feet in one hour during the overtime?
f. (1 points) Bob is staying for an extra hour at a rate of $20 and makes
additional 6 square feet of glass. What is the net change in profit?
g. (2 points) Write the dual problem.
h. (3 points) Solve the dual graphically and state the optimal objective value.
(Hint: You may eliminate one variable (or two variables) using the information
from the primal solution.)
i.

(2 points) Using Part (g), state the change in profit if Doug can produce 7 wood
frames in one day.

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2- Linear Programming Problem (20 points)
The Philbrick Company has two plants on opposite sides of the United States. Each
of these plants produces the same two products and then sells them to wholesalers
within its half of the country. The orders from wholesalers have already been
received for the next two months (February and March), where the number of units
requested are shown below. The company is not obligated to completely fill these
orders but will do so if it can without decreasing its profits.)

Each plant has 20 production days available in February and 23 production days
available in March to produce and ship these products. Inventories are depleted at
the end of January, but each plant has enough capacity to hold 1000 units total of
the two products if an excess amount is produced in February for sale in March. In
either plant, the cost of holding inventory in this way is $3 per unit for product 1
and $4 per unit of product 2.
Each plant has the same two production processes, each of which can be used to
produce either of the two products. The production cost per unit produced of each
product is shown below for each process in each plant.

The production rate for each product (number of units produced per day devoted to
that product) also is given for each process in each plant as follows:

The net sales revenue (selling price minus normal shipping costs) the company
receives when a plant sells the products to its own customers (the wholesalers in its
half of the country) is $83 per unit of product 1 and $112 per unit of product 2.
However, it is also possible (and occasionally desirable) for a plant to make a
shipment to the other half of the country to help fill the sales of the other plant.

WAYNE STATE UNIVERSITY

When this happens, an extra shipping cost of $9 per unit per product 1 and $7 per
unit of product 2 is incurred.
Management now needs to determine how much of each product should be
produced by each production process in each plant during each month, as well as
how much each plant should sell each product in each month and how much each
plant should sell each product in each month to the other plants customers. The
objective is to determine which feasible plan would maximize the total profit (total
net sales revenue minus sum of production costs, inventory costs, and extra
shipping costs).

WAYNE STATE UNIVERSITY

3- Integer Programming Problem (20 points)
The Cash and Carry Building Supply Company has received the following order for
boards in three lengths:

a. (6 points) The company has 25-foot standard-length boards in stock, purchased

at $25. Therefore, the standard-length boards must be cut into the lengths
necessary to meet order requirements. Naturally, the company wishes to
minimize the number of standard-length boards used. The company must
therefore determine how to cut the 25-foot boards to meet the order
requirements and minimize the number of the standard-length boards used.
Define decision variables, and formulate the objective function and constraints.

b. (7 points) Given the large number of orders for 9-foot boards, the Cash and
Carry Building Supply Company requested 18-foot boards from the supplier. The
supplier is willing to sell these new special size boards at a price of $18, but
charges a one-time $1000 fee. How could you modify the problem in Part (a) to
account 18-foot boards? Clearly define the new variables, modify the objective
function and constraints.
c. (7 points) Note that as the length of the standard board increases, the number
of feasible patterns increases exponentially. One way to deal with these large
problems is to generate variables/columns (in our case patterns), only if it is
economically feasible to do so. To measure the economic feasibility, we compute

the reduced cost of a pattern as

vector with
pattern,

aj

cc B B a , where

()

a1
a=
an

is a column

representing the number of length l j, j=1,...,n boards in the

is the cost of board,

( c B B1 )=[ y 1 y n ]

is a row vector of dual

variables. If the reduced cost of a pattern is negative, then we include this

pattern into the problem. Given a set of dual solutions

y1 , , yn

, formulate a

WAYNE STATE UNIVERSITY

problem that chooses the most economical and feasible (length-wise) pattern.
Assume that the length of the board is L. Define decision variables and
formulate objective function and constraints.

WAYNE STATE UNIVERSITY

4- Decision Analysis (20 points)
Chelsea Bush is an emerging candidate for her partys nomination for President of
the United States. She now is considering whether to run in the high-stakes Super
Tuesday primaries. If she enters the Super Tuesday (ST) primaries, she and her
advisers believe that she will either do well (finish first or second) or do poorly
(finish third or worse) with probabilities 0.35 and 0.65, respectively. Doing well on
ST will net candidates campaign approximately $12 million in new contributions,
whereas a poor showing will mean a loss of $6 million after numerous TV ads paid
for. Alternatively, she may choose not to run at all on ST and incur no costs.
a. (2 points) Should Chelsea run for Super Tuesday? What would be the
expected gain/loss?
b. (3 points) What is the expected value of perfect information?
Chelseas advisers realize that her chances of success on ST may be affected by the
outcome of the smaller New Hampshire (NH) primary occurring three weeks before
ST. Political analysts feel that the results of NHs primary are correct three-fifths of
the time in predicting the results of the ST.
c. (2 points) What is the probability that Chelsea would do well in New
Hampshire primary?
d. (2 points) What is the probability that Chelsea would do poor in Super
Tuesday given that she does poor in New Hampshire primary?
The cost of entering and campaigning in the New Hampshire primary is estimated
to be $0.4 million.
e. (11 points) Construct and solve the decision tree for this problem. What
would be the optimal decision regarding running in New Hampshire primary
and Super Tuesday? What is the expected gain/loss?

WAYNE STATE UNIVERSITY

5- Queuing Theory (20 points)
The Friendly Neighbor Grocery Store has a single checkout stand with full-time
cashier. Customers arrive randomly at the stand at a mean rate of 20 per hour. The
service-time distribution is exponential, with a mean of 2 minutes.
a. (1 point) A customer has just arrived at 1:00 pm. What is the probability that
the next customer will arrive between 1:05 and 1:10?
b. (1 point) What is the probability that the number of arrivals between 1:20
and 1:30 is five?
c. (2 points) Show that this process fits the birth-death process by defining
states, specifying the values of the

and

, and constructing the rate

diagram.
d. (3 points) Calculate the proportion of time that there are two customers in
the check-out stand.
e. (2 points) Determine the average number of customers waiting at the queue
of the checkout stand.
f. (2 points) Calculate the average waiting time in the queue.
The manager would like to have the percentage of time that there are more than
two customers at the checkout stand down below 25%. She also would like to have
no more than 5% of the customers needing to wait at least 5 minutes before
beginning service, or at least 7 minutes before finishing service.
g. (6 points) Evaluate how well these criteria are currently being satisfied.
Because there is no room for a second checkout stand, the manager is considering
the alternative of hiring another person to help cashier by bagging the groceries.
This help would reduce the expected time required to process a customer to 1.5
minute, but the distribution still would be exponential.
h. (3 points) Re-evaluate the criteria under this alternative plan.