due on 12/14

ISDS 361B

DR. MABEL KUNG

PROJECT

DUE DATE: Day of the Final Exam before 12 NOON.

GREAT AMERICAN MILL COMPANY

The Great American Mill Company produces five different fabrics. Each fabric can be

woven on one or more of the mill’s 38 looms. The sales department has forecast demand

for the next month. The demand data are shown below along with data on the selling

price per yard and the variable cost per yard. The mill operates 24 hours per day and is

scheduled for 30 days during the coming month.

Table 1: Monthly Demand, Price, Variable Cost, and Purchase Price Data

Fabric Demand

(yards)

Selling Price

($ / yard)

Variable Cost

($ / yard)

Purchase Price

($ / yard)

1 16,500 0.99 0.66 0.80

2 22,000 0.86 0.55 0.70

3 62,000 1.10 0.49 0.60

4 7,500 1.24 0.51 0.70

5 62,000 0.70 0.50 0.70

The mill has two types of looms: dobbie and regular. The dobbie looms are more

versatile and can be used for all five fabrics. The regular looms can produce only three of

the fabrics. There are a total of 38 looms – 8 dobbie and 30 regular. The rate of

production for each fabric on each type of loom is given. The time required to change

over from producing one fabric to another is negligible and does not have to be

considered.

Table 2: Loom Production Rates

Fabric Dobbie Rate

(yard per hour)

Regular Rate

(yard per hour)

1 4.63 *

2 4.63 *

3 5.23 5.23

4 5.23 5.23

5 4.17 4.17

* Fabrics 1 and 2 can be manufactured only on the dobbie loom.

The Great American Mill satisfies all demand with either its own woven fabric or fabric

purchased from another mill. That is, fabrics that cannot be woven at Great American

Mill because of limited loom capacity will be purchased from another mill. The purchase

price of each fabric is also shown in Table 1.

MANAGERIAL REPORT

Develop a model that can be used to schedule production for the Great American Mill,

and, at the same time, determine how many yards of each fabric must be purchased from

another mill. Include a discussion and analysis of the following in the report:

1. The final production schedule and loom assignments for each fabric. 2. The projected profit. 3. A discussion of the value of additional loom time. The mill is considering

purchasing a ninth dobbie loom. What is your estimate of the monthly profit

contribution of this additional loom?

4. A discussion of whether the objective of minimizing total costs may provide a different model than the objective of maximizing profit.

ONLINE Submission:

Your Project which is worth 5% of your course grade is a Linear Programming problem

with 13 Decision Variables and 7 Constraints.

You will email your EXCEL file as attached file. The name of the EXCEL file is your

name, that is, LAST NAME, FIRST NAME, Class Time.

Here is an example of a filename: KUNG,MABEL,7AM or KUNG,MABEL,830 AM

Your email to me, [email protected], will indicate the time when your email is sent.

Any email after the deadline will not be accepted. Your project will be counted as zero

points.

The format of your EXCEL file consists of:

(1) The Data entry of your Linear Programming Model run inside Excel Solver (2) The sensitivity report (3) The Managerial Report with the 4 questions. You may type the answers on

your EXCEL file under the Sensitivity Report. The maximum number of page

for the analysis of all 4 questions is ONE PAGE. GTTP (Get To The Point)