Question 1: General Understanding of Linear Programming 
Describe the set of assumptions you need to make in the application of Linear Programming technique. In the circumstances of the company that either you are currently working or you are familiar with, identify an assumption that you think the most unrealistic. Write concisely why you think so. 

Question 2: Formulation of LP/Solve LP by using software 
(a) GS Mining Corporation excavates gold and silver from two different mines. Each hour that GS operates in mine 1 produces 2 KG of gold and 2 KG of silver. Each hour that GS operates in mine 2 produces 1 KG of gold and 3 KG of silver. To reach the break-even point, GS must produce at least 12 KG of gold and 18 KG of silver per day. Develop a formulation of LP to identify the minimum operational hours at each mine for GS to reach their break-even point. 

Also, use suitable computer software to solve the problem to answer the following question. 
Suppose the price of sliver has gone down. As such, GS Mining Corp now needs 28KG of silver (and 12 KG of gold) per day to reach their daily breakeven point. Identify the operational hours in total for GS Mining Corp to reach their breakeven point now. You must answer the question without reformulating and resolving the problem. 
(10 marks) 
(b) Company Y is producing two different cookies; S cookies and E cookies. The ingredients of both cookies are Flour, Sugar and Chocolate (and nothing else). The company Y has the daily supply of 100KG of Flour, 20KG of Sugar and 30 KG of Chocolate. The mixture for Cookie S must contain at least 10% of Sugar and 10% of Chocolate. The mixture for Cookie E must contain at least 20% of Sugar. Cookie E are sold at $25 per KG and Cookie S are sold at $20 per KG. Develop an LP formulation for Company Y to maximise their revenue from the sales of both cookies. You may assume Company Y can sell as much as cookies that they can produce. 

Also, use suitable computer software to solve the problem to answer the following question. 
The price of Cookie E increases to $30 per KG. What is the new objective function value now? You must answer the question without reformulating and resolving the problem. 
(15 marks)BUS107e Assignment 2 SIM UNIVERSITY Assignment 2 – Page 4 of 4 
Question 3: Formulation of LP/Solve LP by using software/Interpretation of Solution Outputs 
(a) ChemCo is producing a chemical product in three different grades; Grade I (lowest quality), Grade II (medium quality) and Grade III (highest quality). The company buy a raw material at the cost of $6 per 100 litres. At the additional cost of $3 and the usage of 3 hours of process time, 100 litres of raw material produce 60 litres of Grade I and 40 litres of Grade II. The Grade II product can be sold as it is or processed further. At the extra cost of $1 and 1 more hour of process time, 100 litres of Grade II can produce 60 litres of Grade III and 40 litres of Grade I. The price and the maximum demand of each grade are given in the following table. 

Grade I 	
Grade II 	
Grade III 

Price / litre 	
$12 	
$16 	
$26 
Maximum Demand 	60 litres/day 	40 litres/day 	30 litres/day