Linear Programming using Manual Computation and Excel Solver

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1.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 claims 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.

a. Formulate a linear programming model for this problem. List the objective function (minimize or maximize) and all model constraints.

b. Solve this model graphically. Identify the following: each constraint line, feasible solution area, x1, x2 and Z for each point, and clearly identify the optimal solution.

c. Solve problem using MS Excel’s Solver

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