Frontline Solvers Product Mix Problem

This
This is
is a
a very
very basic
basic example
example ofof how
how you
you can
can set
set up
up aa series
series of
of decision
decision variables
variables to
to optimize
optimize choices
choices across
across what
what produc
produc
product
product profit,
profit, parts
parts used,
used, and
and capacity
capacity (in
(in this
this case
case pressing
pressing time
time and
and inventory).
inventory). This
This model
model could
could easily
easily be
be modified
modified
account
account demand,
demand, many
many more
more products,
products, etc.
etc. For
For this
this example,
example, assume
assume your
your company
company manufactures
manufactures pallets
pallets using
using a
a comm
comm
pine
pine chips,
chips, and
and oak
oak chips,
chips, and
and each
each pallet
pallet requires
requires a a certain
certain amount
amount of
of pressing
pressing time
time to
to make.
make. Both
Both pressing
pressing time
time and
and p
p
you must determine the most profitable mix of products
you must determine the most profitable mix of products to build. to build.

Decision
Decision Variables
Variables Variable
Variable Bounds
Bounds Model
Model Bu
Bu
In
In this
this example
example youyou need
need to
to decide
decide the
the optimimal
optimimal Since
Since we
we won't
won't be
be making
making aa negative
negative number
number ofof In
In aa large
large mod
mod
mix
mix of pallets to produce. As a result, we
of pallets to produce. As a result, we have
have set
set pallets,
pallets, we've
we've set
set each
each have
have aa lower
lower bound
bound of
of 0.
0. of
of variable or
variable or c
cells
cells C16:E16
C16:E16 asas our
our Decision
Decision Variables
Variables and
and have
have These
These lower
lower bounds
bounds appear
appear inin the
the Model
Model Task
Task Pane
Pane readable
readable modemod
created
created thethe defined
defined name,
name, Number_to_build.
Number_to_build. as
as Number_to_build
Number_to_build >= >= 0.
0. name,
name, simply
simply s
Alternativey,
Alternativey, we could set
we could set Assume
Assume Non-Negative
Non-Negative toto to
to name
name (for
(for ee
True on the Engine tab of the Task
True on the Engine tab of the Task Pane.Pane. the
the Excel
Excel Ribb
Ribb
Manager.
Manager.
Panel Type
Tahoe Pacific Savannah Aspen O
Pallets 23 15 39 0 Total Profit Our
Our objective
objective i
As
As aa result,
result, we
we
Profit $450 $1,150 $800 $400 $58,800
Objective
Objective loca
loca
Total_profit.
Total_profit.
Resources Required per Pallet Type Used Available
Glue 50 50 100 50 5800 5,800 quarts
The
The example
example mm
Pressing 5 15 10 5 730 730 hours limit
limit the
the numbe
numbe
Pine Chips 500 400 300 200 29200 29,200 pounds product
product to
to the
the
of
of the
the Task
Task Pan
Pan
Oak Chips 500 750 250 500 32500 60,500 pounds Number_Used
Number_Used < <

Model
Model Notes
Notes
Although
Although this
this is
is a
a good
good basic
basic example
example ofof a
a product
product mix
mix problem,
problem, bear in mind
bear in mind the
the limitations
limitations of
of this
this model.
model. For
For example,
example,
elasticity
elasticity are
are not
not included
included inin the
the model
model --
-- we
we assume
assume that
that it
it does
does not
not matter
matter how
how many
many pallets
pallets of
of each
each type
type we
we build,
build, we
we
them.
them. Nor
Nor are
are there
there any
any pre-specified
pre-specified minimum
minimum oror maximum
maximum number
number of
of products
products that
that are
are required
required to
to be
be manufactured.
manufactured. T T
restrictions
restrictions can
can bebe studied
studied byby examining
examining aa Sensitivity
Sensitivity Report,
Report, which
which you
you can
can create
create after
after the
the status
status bar
bar shows
shows "Solver
"Solver foun
foun
Reports
Reports on
on the
the RSP
RSP ribbon
ribbon and
and then
then selecting
selecting Optimization
Optimization and
and then
then Sensitivity.
Sensitivity.
x Problem
hoices
hoices across
across what
what products
products to
to produce
produce based
based on
on
could
could easily
easily be
be modified
modified and
and scaled
scaled to
to take
take into
into
tures
tures pallets
pallets using
using a
a common
common parts
parts inventory
inventory of
of glue,
glue,
.. Both
Both pressing
pressing time
time and
and parts
parts are
are in
in limited
limited supply
supply and
and

Model
Model Building
Building Tip:
Tip: Defined
Defined Names
Names
In
In aa large
large model,
model, using
using defined
defined names
names forfor aa range
range
of
of variable or constraint cells will create aa more
variable or constraint cells will create more
readable
readable model
model for
for the
the User.
User. To
To create
create aa defined
defined
name,
name, simply
simply select
select the
the range
range of
of cells
cells you
you want
want
to
to name
name (for
(for example
example C16:F16),
C16:F16), click
click Formulas
Formulas in in
the
the Excel
Excel Ribbon,
Ribbon, and
and then
then select
select Name
Name
Manager.
Manager.

Objective
Objective Function
Function
Our
Our objective
objective inin this
this model
model isis to
to maximize
maximize profit.
profit.
As
As aa result,
result, we
we have
have chosen
chosen to to maximize
maximize our
our
Objective
Objective located
located in in cell
cell G17
G17 andand named
named this
this cell
cell
Total_profit.
Total_profit.

Constraints
Constraints
The
The example
example model
model contains
contains four
four constraints
constraints which
which
limit
limit the number of parts or pressing time
the number of parts or pressing time used
used per
per
product
product to
to the
the amount
amount available.
available. In
In the
the Model
Model tab
tab
of
of the
the Task
Task Pane,
Pane, these
these constraints
constraints appear
appear as:
as:
Number_Used <= Number_Available.
Number_Used <= Number_Available.

this
this model. For example,
model. For example, market
market demand
demand andand price
price
of
of each
each type
type we
we build,
build, we
we will
will always
always be
be able
able to
to sell
sell
red
red to
to be
be manufactured.
manufactured. The
The effect
effect of
of introducing
introducing these
these
atus
atus bar
bar shows
shows "Solver
"Solver found
found a
a solution."
solution." by
by clicking
clicking
 Frontline Solvers Product Mix Problem
This
This is
is a
a very
very basic
basic example
example ofof how
how you
you can
can set
set up
up aa series
series of
of decision
decision variables
variables to
to optimize
optimize choices
choices across
across what
what produc
produc
product
product profit,
profit, parts
parts used,
used, and
and capacity
capacity (in
(in this
this case
case pressing
pressing time
time and
and inventory).
inventory). This
This model
model could
could easily
easily be
be modified
modified
account
account demand,
demand, many
many more
more products,
products, etc.
etc. For
For this
this example,
example, assume
assume your
your company
company manufactures
manufactures pallets
pallets using
using a
a comm
comm
pine
pine chips,
chips, and
and oak
oak chips,
chips, and
and each
each pallet
pallet requires
requires a a certain
certain amount
amount of
of pressing
pressing time
time to
to make.
make. Both
Both pressing
pressing time
time and
and p
p
you must determine the most profitable mix of products
you must determine the most profitable mix of products to build. to build.

Decision
Decision Variables
Variables Variable
Variable Bounds
Bounds Model
Model Bu
Bu
In
In this
this example
example youyou need
need to
to decide
decide the
the optimimal
optimimal Since
Since we
we won't
won't be
be making
making aa negative
negative number
number ofof In
In aa large
large mod
mod
mix
mix of pallets to produce. As a result, we
of pallets to produce. As a result, we have
have set
set pallets,
pallets, we've
we've set
set each
each have
have aa lower
lower bound
bound of
of 0.
0. of
of variable or
variable or c
cells
cells C16:E16
C16:E16 asas our
our Decision
Decision Variables
Variables and
and have
have These
These lower
lower bounds
bounds appear
appear inin the
the Model
Model Task
Task Pane
Pane readable
readable modemod
created
created thethe defined
defined name,
name, Number_to_build.
Number_to_build. as
as Number_to_build
Number_to_build >= >= 0.
0. name,
name, simply
simply s
Alternativey,
Alternativey, we could set
we could set Assume
Assume Non-Negative
Non-Negative toto to
to name
name (for
(for ee
True on the Engine tab of the Task
True on the Engine tab of the Task Pane.Pane. the
the Excel
Excel Ribb
Ribb
Manager.
Manager.
Panel Type
Tahoe Pacific Savannah Aspen O
Pallets 23 15 39 0 Total Profit Our
Our objective
objective i
As
As aa result,
result, we
we
Profit $450 $1,150 $800 $400 $58,800
Objective
Objective loca
loca
Total_profit.
Total_profit.
Resources Required per Pallet Type Used Available
Glue 50 50 100 50 5800 5,800 quarts
Pressing 5 15 10 5 730 730 hours
Pine Chips 500 400 300 200 29200 29,200 pounds
Oak Chips 500 750 250 500 32500 60,500 pounds

Model
Model Notes
Notes
Although
Although this
this is
is a
a good
good basic
basic example
example ofof a
a product
product mix
mix problem,
problem, bear in mind
bear in mind the
the limitations
limitations of
of this
this model.
model. For
For example,
example,
elasticity
elasticity are
are not
not included
included inin the
the model
model --
-- we
we assume
assume that
that it
it does
does not
not matter
matter how
how many
many pallets
pallets of
of each
each type
type we
we build,
build, we
we
them.
them. Nor
Nor are
are there
there any
any pre-specified
pre-specified minimum
minimum oror maximum
maximum number
number of
of products
products that
that are
are required
required to
to be
be manufactured.
manufactured. T T
restrictions
restrictions can
can bebe studied
studied byby examining
examining aa Sensitivity
Sensitivity Report,
Report, which
which you
you can
can create
create after
after the
the status
status bar
bar shows
shows "Solver
"Solver foun
foun
Reports
Reports on
on the
the RSP
RSP ribbon
ribbon and
and then
then selecting
selecting Optimization
Optimization and
and then
then Sensitivity.
Sensitivity.
x Problem
hoices
hoices across
across what
what products
products to
to produce
produce based
based on
on
could
could easily
easily be
be modified
modified and
and scaled
scaled to
to take
take into
into
tures
tures pallets
pallets using
using a
a common
common parts
parts inventory
inventory of
of glue,
glue,
.. Both
Both pressing
pressing time
time and
and parts
parts are
are in
in limited
limited supply
supply and
and

Model
Model Building
Building Tip:
Tip: Defined
Defined Names
Names
In
In aa large
large model,
model, using
using defined
defined names
names forfor aa range
range
of
of variable or constraint cells will create aa more
variable or constraint cells will create more
readable
readable model
model for
for the
the User.
User. To
To create
create aa defined
defined
name,
name, simply
simply select
select the
the range
range of
of cells
cells you
you want
want
to
to name
name (for
(for example
example C16:F16),
C16:F16), click
click Formulas
Formulas in in
the
the Excel
Excel Ribbon,
Ribbon, and
and then
then select
select Name
Name
Manager.
Manager.

Objective
Objective Function
Function
Our
Our objective
objective inin this
this model
model isis to
to maximize
maximize profit.
profit.
As
As aa result,
result, we
we have
have chosen
chosen to to maximize
maximize our
our
Objective
Objective located
located in in cell
cell G17
G17 andand named
named this
this cell
cell
Total_profit.
Total_profit.

Constraints
Constraints
The
The example
example model
model contains
contains four
four constraints
constraints which
which
limit
limit the number of parts or pressing time
the number of parts or pressing time used
used per
per
product
product to
to the
the amount
amount available.
available. In
In the
the Model
Model tab
tab
of
of the
the Task
Task Pane,
Pane, these
these constraints
constraints appear
appear as:
as:
Number_Used <= Number_Available.
Number_Used <= Number_Available.

this
this model. For example,
model. For example, market
market demand
demand andand price
price
of
of each
each type
type we
we build,
build, we
we will
will always
always be
be able
able to
to sell
sell
red
red to
to be
be manufactured.
manufactured. The
The effect
effect of
of introducing
introducing these
these
atus
atus bar
bar shows
shows "Solver
"Solver found
found a
a solution."
solution." by
by clicking
clicking
 Frontline Solvers Product Mix Problem
This
This is
is a
a very
very basic
basic example
example ofof how
how you
you can
can set
set up
up aa series
series of
of decision
decision variables
variables to
to optimize
optimize choices
choices across
across what
what produc
produc
product
product profit,
profit, parts
parts used,
used, and
and capacity
capacity (in
(in this
this case
case pressing
pressing time
time and
and inventory).
inventory). This
This model
model could
could easily
easily be
be modified
modified
account
account demand,
demand, many
many more
more products,
products, etc.
etc. For
For this
this example,
example, assume
assume your
your company
company manufactures
manufactures pallets
pallets using
using a
a comm
comm
pine
pine chips,
chips, and
and oak
oak chips,
chips, and
and each
each pallet
pallet requires
requires a a certain
certain amount
amount of
of pressing
pressing time
time to
to make.
make. Both
Both pressing
pressing time
time and
and p
p
you must determine the most profitable mix of products
you must determine the most profitable mix of products to build. to build.

Decision
Decision Variables
Variables Variable
Variable Bounds
Bounds Model
Model Bu
Bu
In
In this
this example
example youyou need
need to
to decide
decide the
the optimimal
optimimal Since
Since we
we won't
won't be
be making
making aa negative
negative number
number ofof In
In aa large
large mod
mod
mix
mix of pallets to produce. As a result, we
of pallets to produce. As a result, we have
have set
set pallets,
pallets, we've
we've set
set each
each have
have aa lower
lower bound
bound of
of 0.
0. of
of variable or
variable or c
cells
cells C16:E16
C16:E16 asas our
our Decision
Decision Variables
Variables and
and have
have These
These lower
lower bounds
bounds appear
appear inin the
the Model
Model Task
Task Pane
Pane readable
readable modemod
created
created thethe defined
defined name,
name, Number_to_build.
Number_to_build. as
as Number_to_build
Number_to_build >= >= 0.
0. name,
name, simply
simply s
Alternativey,
Alternativey, we could set
we could set Assume
Assume Non-Negative
Non-Negative toto to
to name
name (for
(for ee
True on the Engine tab of the Task
True on the Engine tab of the Task Pane.Pane. the
the Excel
Excel Ribb
Ribb
Manager.
Manager.
Panel Type
Tahoe Pacific Savannah Aspen O
Pallets 23 15 39 0 Total Profit Our
Our objective
objective i
As
As aa result,
result, we
we
Profit $450 $1,150 $800 $400 $58,800
Objective
Objective loca
loca
Total_profit.
Total_profit.
Resources Required per Pallet Type Used Available
Glue 50 50 100 50 5800 5,800 quarts
Pressing 5 15 10 5 730 730 hours
Pine Chips 500 400 300 200 29200 29,200 pounds
Oak Chips 500 750 250 500 32500 60,500 pounds

Model
Model Notes
Notes
Although
Although this
this is
is a
a good
good basic
basic example
example ofof a
a product
product mix
mix problem,
problem, bear in mind
bear in mind the
the limitations
limitations of
of this
this model.
model. For
For example,
example,
elasticity
elasticity are
are not
not included
included inin the
the model
model --
-- we
we assume
assume that
that it
it does
does not
not matter
matter how
how many
many pallets
pallets of
of each
each type
type we
we build,
build, we
we
them.
them. Nor
Nor are
are there
there any
any pre-specified
pre-specified minimum
minimum oror maximum
maximum number
number of
of products
products that
that are
are required
required to
to be
be manufactured.
manufactured. T T
restrictions
restrictions can
can bebe studied
studied byby examining
examining aa Sensitivity
Sensitivity Report,
Report, which
which you
you can
can create
create after
after the
the status
status bar
bar shows
shows "Solver
"Solver foun
foun
Reports
Reports on
on the
the RSP
RSP ribbon
ribbon and
and then
then selecting
selecting Optimization
Optimization and
and then
then Sensitivity.
Sensitivity.
x Problem
hoices
hoices across
across what
what products
products to
to produce
produce based
based on
on
could
could easily
easily be
be modified
modified and
and scaled
scaled to
to take
take into
into
tures
tures pallets
pallets using
using a
a common
common parts
parts inventory
inventory of
of glue,
glue,
.. Both
Both pressing
pressing time
time and
and parts
parts are
are in
in limited
limited supply
supply and
and

Model
Model Building
Building Tip:
Tip: Defined
Defined Names
Names
In
In aa large
large model,
model, using
using defined
defined names
names forfor aa range
range
of
of variable or constraint cells will create aa more
variable or constraint cells will create more
readable
readable model
model for
for the
the User.
User. To
To create
create aa defined
defined
name,
name, simply
simply select
select the
the range
range of
of cells
cells you
you want
want
to
to name
name (for
(for example
example C16:F16),
C16:F16), click
click Formulas
Formulas in in
the
the Excel
Excel Ribbon,
Ribbon, and
and then
then select
select Name
Name
Manager.
Manager.

Objective
Objective Function
Function
Our
Our objective
objective inin this
this model
model isis to
to maximize
maximize profit.
profit.
As
As aa result,
result, we
we have
have chosen
chosen to to maximize
maximize our
our
Objective
Objective located
located in in cell
cell G17
G17 andand named
named this
this cell
cell
Total_profit.
Total_profit.

Constraints
Constraints
The
The example
example model
model contains
contains four
four constraints
constraints which
which
limit
limit the number of parts or pressing time
the number of parts or pressing time used
used per
per
product
product to
to the
the amount
amount available.
available. In
In the
the Model
Model tab
tab
of
of the
the Task
Task Pane,
Pane, these
these constraints
constraints appear
appear as:
as:
Number_Used <= Number_Available.
Number_Used <= Number_Available.

this
this model. For example,
model. For example, market
market demand
demand andand price
price
of
of each
each type
type we
we build,
build, we
we will
will always
always be
be able
able to
to sell
sell
red
red to
to be
be manufactured.
manufactured. The
The effect
effect of
of introducing
introducing these
these
atus
atus bar
bar shows
shows "Solver
"Solver found
found a
a solution."
solution." by
by clicking
clicking
Microsoft Excel 12.0 Answer Report
Worksheet: [PanelManufacturing.xls]Sheet5
Report Created: 10/5/2011 1:16:57 PM

Target Cell (Min)

Cell Name Original Value Final Value
$G$14 Cost Total 0 8451.11111111

Adjustable Cells
Cell Name Original Value Final Value
$C$13 MWH Present 0 111.111111111
$D$13 MWH LowSulfur 0 -1.1368684E-13
$E$13 MWH StackFilters 0 1688.88888889
$F$13 MWH Import 0 200

Constraints
Cell Name Cell Value Formula Status Slack
$G$13 MWH Total 2000 $G$13=$D$18 Not Binding 0
$G$15 Pollution Total 2800 $G$15<=$D$19 Binding 0
$F$13 MWH Import 200 $F$13<=$D$20 Binding 0
The Burtonville Municipal Power Company must produce 2000 megawatt-hours (mwh) of electricity each hour. Air pollution or
require it to keep emissions of pollutants below 2800 pounds per hour. (For purposes of this exercise we ignore interesting phe
like weather and load fluctuation.) The company must decide how to do this at least cost. It can switch to low-sulfur fuel, use
and either high- or low-sulfur fuel, or import power from elsewhere. The relevant characteristics of these options are given in
The company can import only 200 mwh per hour. What should the company do?

Decision
Decision Variables
Variables

Production Method
Present LowSulfur StackFilters Import Total Objective
Objective Function
Function
MWH 111.1111111 -1.13687E-13 1688.888889 200 2000
Cost 3.5 5 0.8 4 8451.1111
Pollution 10 1.2 1 0 2800

Must produce 2000

Pollution limit 2800 Constraints
Constraints
import limit 200
Although
Although this
this is
is a
a good
good basic
basic example
example of
of a
a product
product mix
mix problem,
problem, b b
elasticity
elasticity are
are not
not included
included in
in the
the model
model --
-- we
we assume
assume that
that it
it does
does n
n
Nor
Nor are
are there
there any
any pre-specified
pre-specified minimum
minimum oror maximum
maximum number
number ofof p
p
restrictions
restrictions can
can be
be studied
studied by
by examining
examining a
a Sensitivity
Sensitivity Report,
Report, whic
whic
on
on the RSP ribbon and then selecting Optimization and then
the RSP ribbon and then selecting Optimization and then Sensit
Sensit
ctricity each hour. Air pollution ordinances
exercise we ignore interesting phenomena
can switch to low-sulfur fuel, use stack filters
stics of these options are given in Table 11-4.

Objective
Objective Function
Function
 Model
Model Notes
Notes
mple
mple of
of aa product
product mix
mix problem,
problem, bear in mind
bear in mind the
the limitations
limitations of
of this
this model.
model. For
For example,
example, market
market demand
demand and
and price
price
model
model --
-- we
we assume
assume that
that it
it does
does not
not matter
matter how
how many
many pallets
pallets of
of each
each type
type we
we build,
build, we
we will
will always
always be
be able
able to
to sell
sell them.
them.
minimum
minimum oror maximum
maximum number
number ofof products
products that
that are
are required
required to
to be
be manufactured.
manufactured. TheThe effect
effect of
of introducing
introducing these
these
mining
mining aa Sensitivity
Sensitivity Report,
Report, which
which you
you can
can create
create after
after the
the status
status bar
bar shows
shows "Solver
"Solver found
found a
a solution."
solution." by
by clicking
clicking Reports
Reports
ting Optimization and then Sensitivity.
ting Optimization and then Sensitivity.
d
d price
price
to
to sell
sell them.
them.
hese
hese
cking
cking Reports
Reports