101_Session_Four_inclassnotes

101_Session_Four_inclassnotes - MGMT 101 Management Science...

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Unformatted text preview: MGMT 101: Management Science Professor Shuya Yin Session Four § Outline for today: § Applications of Linear Programming Models in other business settings So far …… § KARMA Computer problem § Galaxy Industries (space ray and zapper) § Golden Electronics (GE45 and GE60) § Advertising (Workday Ads and Sunday Ads) § Financing Strategy (Model Y and Model Z from internal or external investment) § Fabulous Nuts (regular, deluxe and holiday) Production models What else? § Production and Inventory planning problem in multiple periods § …… § Staff scheduling problem (Chapter 3.3) § Transportation and distribution problem (Chapter 3.5) § Funds management problem Example 1: Funds management problem § Tritech Mortgage specializes in making first, second, and even third trust deed loans on residential properties and first trust deeds on commercial properties. Any funds not invested in mortgages are invested in an interest-bearing savings account. The following table gives the rate of return and the company’s risk level for each possible type of loans. Tritech wishes to invest $68,000K in available funding so that: § Yearly return is maximized § At least $5,000K is to be available in a savings account for emergencies § At least 80% of the money invested in trust deeds should be in residential properties § At least 60% of the money invested in residential properties should be in first trust deeds § The average risk should no exceed 5 Loan Type Rate of Return Risk First Trust Deeds 7.75% 4 Second Trust Deeds 11.25% 6 Third Trust Deeds 14.25% 9 Commercial Trust Deeds 8.75% 3 Savings Account 4.45% Tritech Mortgage problem formulation Example 2: Staff scheduling (chapter 3.3) § A fast-food restaurant has daily staff needs that range from 12 to 19 students depending on varying work loads each day of the week as shown below: Day Staff Needs Monday 18 Tuesday 16 Wednesday 15 Thursday 16 Friday 19 Saturday 14 Sunday 12 § In addition, a labor requirement must be met that employees work a five consecutive days followed by two days off. Thus, the allowable shifts are Monday through Friday, Tuesday through Saturday, Wednesday through Sunday, etc. Each employee earns $200 per week. § As the personnel manager of the restaurant, how would you develop a feasible staff schedule that ensures that staff needs are covered at a minimal weekly cost? Formulation – staff scheduling § Shift 1 (starting on Mon) will work on: § Shift 2 (starting on Tue) will work on: § Shift 3 (starting on Wed) will work on: § Shift 4 (starting on Thu) will work on: § Shift 5 (starting on Fri) will work on: § Shift 6 (starting on Sat) will work on: § Shift 7 (starting on Sun) will work on: Mon (1) Tue (2) Wed (3) Thu (4) Fri (5) Sat (6) Sun (7) Let us try it § Handout will be distributed in class....
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101_Session_Four_inclassnotes - MGMT 101 Management Science...

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