Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Universal Claims Processors processes insurance claims for large national insurance companies. Most claim processing is done by a large pool of computer operators, some of whom are permanent and some of whom are temporary. A permanent operator can process 16 claims per day, whereas a temporary operator can process 12 per day, and on average the company processes at least 450 claims each day. The company has 40 computer workstations. A permanent operator generates about 0.5 claim with errors each day, whereas a temporary operator averages about 1.4 defective claims per day. The company wants to limit claims with errors to 25 per day. A permanent operator is paid $64 per day, and a temporary operator is paid $42 per day. The company wants to determine the number of permanent and temporary operators to hire in order to minimize costs. Formulate a linear programming model for this problem. Define x1
as the number of permanent operators to hire, x2 as the number of temporary operators to hire, and Z as the total cost. Which of the following model formulations is correct?

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Minimize Z=64x1+42x2
Subject to 16x1+12x2>=450
                            x1+x2>=40
                 0.5x1+1.4x2<=25
                                 x1, x2>=0

Minimize Z=64x1+42x2
Subject to 16x1+12x2>=450
                               x1+x2=40
                  0.5x1+1.4x2<=25
                                  x1, x2>=0

Minimize Z=64x1+42x2
Subject to 16x1+12x2<=450
                            x1+x2<=40
                 0.5x1+1.4x2<=25
                                 x1, x2>=0

Minimize Z=64x1+42x2
Subject to 16x1+12x2>=450
                            x1+x2<=40
                  0.5x1+1.4x2<=25
                              x1, x2>=0

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