Posted: February 15th, 2016

A small aerospace company is considering the following eight projects: 1. develop an automated test facility

A small aerospace company is considering the following eight projects:

1. develop an automated test facility

2.barcode all company inventory and machinery

3.introduce a CAD/CAM system

4. buy a new lathe and deburring station

5.institute FMS (flexible manufacturing system)

6.install a LAN ( local area network)

7.develop AIS (artificial intelligence simulation)

8.set up a TQM (total quality management) initiative

Each project has been rated on the following five attributes:

…Return on investment (ROI)

…Cost

…Productivity improvement

…Worker requirements

…Degree of technological risk

The ratings for each of the projects are given in the table below:

Project ROI($) Cost($) Productivity Manpower Risk

1 2,070 900 3 18 3

2 456 240 2 18 2

3 670 335 2 27 4

4 350 700 0 36 1

5 495 410 1 42 1

6 380 190 0 6 0

7 1,500 500 3 48 2

8 480 160 2 24 3

The company has set the following five goals:

…Achieve a return on investment of at least $ 3,250

…Limit costs to $ 1,300

…Achieve a productivity improvement of at least 6

…Limit manpower to 108

…Limit technological risk to a total of 4

1. Formulate the problem as a zero-one integer program with 8 decision variables and 5 constraints.

…Use the QM software (mixed integer programming) to solve.

…Set the variable type for each of the projects to “0/1″

…Set all objective function values to zero

2. Formulate a goal program by modifying the constraints from (1) in the mixed integer programming module.

…Set the variable type for each of the deviation variables to “Real”

…Use the following weights for undesirable deviations to arrive at your answer:

Goal1- 12.0 Goal2- 1.0 Goal3- 500.00

Goal4- 300.0 Goal5- 50.0

Use the QM software to solve the problem. only the results from (1) and (2)—File, Print, Original Problem with Answers. Do not print out the iterations to the problem!

Note: This problem cannot be solved using the “Goal Programming” module in the QM software as the decision variables are 0/1.