PharmaPlus operates a chain of 30 pharmacies. The pharmacies are staffed by licensed pharmacists and pharmacy technicians. The company currently employs 85 full-time-equivalent pharmacists (combination of full time and part time) and 175 full-time-equivalent technicians. Each spring management reviews current staffing levels and makes hiring plans for the year. A recent forecast of the prescription load for the next year shows that at least 250 full-time-equivalent employees (pharmacists and technicians) will be required to staff the pharmacies. The personnel department expects 10 pharmacists and 30 technicians to leave over the next year. To accommodate the expected attrition and prepare for future growth, management states that at least 15 new pharmacists must be hired. In addition, PharmaPlus’s new service quality guidelines specify no more than two technicians per licensed pharmacist. The average salary for licensed pharmacists is $40 per hour and the average salary for technicians is $10 per hour.

a. Determine a minimum-cost staffing plan for PharmaPlus. How many pharmacists and technicians are needed?

Let P

=

number of full-time equivalent pharmacists

T

=

number of full-time equivalent technicians

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2. Southern Oil Company produces two grades of gasoline: regular and premium. The profit contributions are $0.30 per gallon for regular gasoline and $0.50 per gallon for premium gasoline. Each gallon of regular gasoline contains 0.3 gallons of grade A crude oil and each gallon of premium gasoline contains 0.6 gallons of grade A crude oil. For the next production period, Southern has 18,000 gallons of grade A crude oil available. The refinery used to produce the gasolines has a production capacity of 50,000 gallons for the next production period. Southern Oil’s distributors have indicated that demand for the premium gasoline for the next production period will be at most 20,000 gallons.

a. Formulate a linear programming model that can be used to determine the number of gallons of regular gasoline and the number of gallons of premium gasoline that should be produced in order to maximize total profit contribution. If required, round your answers to two decimal places.

Let R

=

number of gallons of regular gasoline produced

P

=

number of gallons of premium gasoline produced

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3. Par, Inc., is a small manufacturer of golf equipment and supplies. Par’s distributor believes a market exists for both a medium-priced golf bag, referred to as a standard model, and a high-priced golf bag, referred to as a deluxe model. The distributor is so confident of the market that, if Par can make the bags at a competitive price, the distributor will purchase all the bags that Par can manufacture over the next three months. A careful analysis of the manufacturing requirements resulted in the following table, which shows the production time requirements for the four required manufacturing operations and the accounting department’s estimate of the profit contribution per bag:

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The director of manufacturing estimates that 630 hours of cutting and dyeing time, 600 hours of sewing time, 708 hours of finishing time, and 135 hours of inspection and packaging time will be available for the production of golf bags during the next three months.

Select the correct graph that shows the optimal solution if Par’s management encounters the following independent situations:

a. The accounting department revises its estimate of the profit contribution for the deluxe bag to $18 per bag.

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C.New sewing equipment is available that would increase the sewing operation capacity to 750 hours. (Assume that 10A + 9B is the appropriate objective function.

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5. Georgia Cabinets manufactures kitchen cabinets that are sold to local dealers throughout the Southeast. Because of a large backlog of orders for oak and cherry cabinets, the company decided to contract with three smaller cabinetmakers to do the final finishing operation. For the three cabinetmakers, the number of hours required to complete all the oak cabinets, the number of hours required to complete all the cherry cabinets, the number of hours available for the final finishing operation, and the cost per hour to perform the work are shown here:

Cabinetmaker 1

Cabinetmaker 2

Cabinetmaker 3

Hours required to complete all the oak cabinets

50

44

32

Hours required to complete all the cherry cabinets

61

46

34

Hours available

35

25

30

Cost per hour

$36

$43

$56

For example, Cabinetmaker 1 estimates that it will take 50 hours to complete all the oak cabinets and 61 hours to complete all the cherry cabinets. However, Cabinetmaker 1 only has 35 hours available for the final finishing operation. Thus, Cabinetmaker 1 can only complete 35/50 = 0.7, or 70%, of the oak cabinets if it worked only on oak cabinets. Similarly, Cabinetmaker 1 can only complete 35/61 = 0.57, or 57%, of the cherry cabinets if it worked only on cherry cabinets.

a. Formulate a linear programming model that can be used to determine the proportion of the oak cabinets and the proportion of the cherry cabinets that should be given to each of the three cabinetmakers in order to minimize the total cost of completing both projects.

Let

O1 = proportion of Oak cabinets assigned to cabinetmaker 1

O2 = proportion of Oak cabinets assigned to cabinetmaker 2

O3 = proportion of Oak cabinets assigned to cabinetmaker 3

C1 = proportion of Cherry cabinets assigned to cabinetmaker 1

C2 = proportion of Cherry cabinets assigned to cabinetmaker 2

C3 = proportion of Cherry cabinets assigned to cabinetmaker 3

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6. Better Products, Inc., manufactures three products on two machines. In a typical week, 40 hours are available on each machine. The profit contribution and production time in hours per unit are as follows:

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Two operators are required for machine 1; thus, 2 hours of labor must be scheduled for each hour of machine 1 time. Only one operator is required for machine 2. A maximum of 100 labor-hours is available for assignment to the machines during the coming week. Other production requirements are that product 1 cannot account for more than 50% of the units produced and that product 3 must account for at least 20% of the units produced.

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7. La Jolla Beverage Products is considering producing a wine cooler that would be a blend of a white wine, a rose wine, and fruit juice. To meet taste specifications, the wine cooler must consist of at least 45% white wine, at least 15% and no more than 30% rose, and exactly 20% fruit juice. La Jolla purchases the wine from local wineries and the fruit juice from a processing plant in San Francisco. For the current production period, 10500 gallons of white wine and 8500 gallons of rose wine can be purchased; an unlimited amount of fruit juice can be ordered. The costs for the wine are $1 per gallon for the white and $1.5 per gallon for the rose; the fruit juice can be purchased for $0.5 per gallon. La Jolla Beverage Products can sell all of the wine cooler it can produce for $2.5 per gallon.

a. Is the cost of the wine and fruit juice a sunk cost or a relevant cost in this situation?