Question: In this question, please reconsider the Filatoi Riuniti case and linear optimization model. Recall that Filatoi Riuniti seeks to minimize:

 total production and transportation costs

subject to:

 constraints to meet demand for the four sizes of yarn, and

 constraints that limit the machine hours used by each supplier to the supplier’s monthly capacity.

The attached spreadsheet output entitled "Filatoi Riuniti – Optimal production schedule – March" contains data for a modified version of the Filatoi case and model. The optimal solution of the resulting linear optimization model is shown in the table on the upper left of the spreadsheet.

1. [10 points] Write a concise memo (e.g., for your boss), detailing the optimal procurement strategy and briefly explaining the linear optimization methodology.
2. [10 points] Suppose that due to contractual obligations, if Filatoi outsources to Castri, then they also have to outsource to Estensi. Let C be a binary variable that is equal to 1 if Filatoi outsources to Castri and 0 otherwise. Let E be a binary variable that is equal to 1 if Filatoi outsources to Estensi. Write a linear binary constraint that enforces this requirement.
3. [10 extra credit points] Recall from lecture that the linear programming variables can be represented succinctly as X _ys , where y ranges from 1 to 4 (representing extrafine, fine, medium and course yarn) and s ranges from A to G (representing the yarn producers). Write linear constraints that require the outsourcing quantities from Castri to be zero if we decide not to outsource with them, by combining appropriate X _ys variables with the binary variable C (hint: note that if we do outsource to Castri, we do not want our outsourcing quantities to be restricted by this constraint).

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document