Case Problems:

1. The Elixer Drug Company produces a drug from two ingredients. Each ingredient contains the
same three antibiotics, in different proportions. One gram of ingredient 1 contributes 3 units, and 1
gram of ingredient 2 contributes 1 unit of antibiotic 1; the drug requires 6 units. At least 4 units of
antibiotic 2 are required, and the ingredients contribute 1 unit each per gram. At least 12 units of
antibiotic 3 are required; a gram of ingredient 1 contributes 2 units, and a gram of ingredient 2
contributes 6 units. The cost for a gram of ingredient 1 is $80, and the cost for a gram of ingredient 2
is $50. The company wants to formulate a linear programming model to determine the number of
grams of each ingredient that must go into the drug in order to meet the antibiotic requirements at
the minimum cost.

a. Formulate a linear programming model for this problem.

b. Solve problem using graphical analysis.

2. McAuliffes Irish Pub is known for two type of cheese burgers- one called the Dublin Burger
another called the Keating Burger. The chef makes one using three types of cheeses, but in
different quantities. The Dublin Burger uses 60 percent Dubliner cheese, 25 percent swiss cheese
and 15 percent Coolea Cheese. The Keating Burger uses 20 percent Dubliner Cheese, 30 percent
swiss cheese and 50 percent Coolea cheese. The Dublin sells for $8 and Keating sells for $6.50.
The pub has 5 kg of each of the three cheeses available every day, and each kilogram of cheese is
enough to make 25 cheeseburgers. The pub has enough employees to make 305 cheeseburgers a
day. The manager wants to know how many of each of the two cheeseburgers should ideally be
made everyday in order to maximize sales.

a. Formulate a linear programming model for this problem.

b. Solve this model by using graphical analysis.

3. Janet Lopez is establishing an investment portfolio that will include stock and bond funds. She has
$720,000 to invest, and does not want the portfolio to include more than 65% stocks. The average
annual return for the stock fund she plans to invest in is 18%, where as the average annual return for
the bond fund is 6%. She further estimates that the most she could lose in the next year in stock
fund is 22%, where as the most she could lose in the bond fund is 5%. To reduce her risk, she wants
to limit her potential maximum losses to $100,000.

a. Formulate a linear programming model for this problem.

b. Solve this model by using graphical analysis.

4. Gillean Restaurant has an ice cream counter where it sells two main products, ice cream and
frozen yoghurt, each in a variety of flavors, The restaurant makes one order of ice cream and yogurt
a week, and the store has enough freezer space for 115 gallons total of both products, A gallon of
frozen yogurt costs $0.75 and a gallon of ice cream costs $0.93, and the restaurant budgets $90
each week for these products. The manager estimates that each week the restaurant sells at least
twice as much ice cream as frozen yogurt. Profit per gallon of ice cream is $4.15, and profit per
gallon of yogurt is $3.60.
c. Formulate a linear programming model for this problem.
d. Solve this model by using graphical analysis.