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the assignment needs to use Excel to solve all the problems. The original Excel file is not reuquired, but every step with formula needs to take screenshot. Every graph needs to be labelled and explained. Make sure you know how to solve all the problems and capable to finish them before the due time…
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Assignment 5
(2) The textile mill model •

Produces 3 types of fabric (F1, F2, F3) on 2 types of machines (Regular, Special). Or Buy.
Time to delivery is 13 weeks.
15 regular machines (F2, F3) + 3 special machines (F1, F2, F3) + Buy (F1, F2, F3)
Demand for F1, F2, F3 is 45000, 76500, 10000 yards.
Special loom capacity in yards/hour – 4.7, 5.2, 4.4
Regular loom capacity in yards/hour – 0, 5.2, 4.4
Manufacture cost in \$/yard – 0.65, 0.61, 0.50
Outsource cost in \$/yard – 0.85, 0.75, 0.65
2.1. Minimize total cost to meet demand when mill operates 24×7. Hint: If your model is right, total
cost to meet demand = \$83756.12.
2.2. Minimize total cost to meet demand when mill closes during weekends and special loom capacity
reduces by 50%. Clearly mention the change in total cost.
(3) Modelling and Optimization.
3.1. Chapter 13 – Solve problem 23.
assumptions?
Did you make any assumptions?
If yes, what are your
3.2. Repeat the problem when “the per-pound cost of holding inventory each month is estimated to be
2.2% of the cost of the product”. Clearly mention the total cost, (production + inventory) in both cases.
Assignment 5 is continued on next page…
(4) Chapter 13 – Solve problem 23 continued…
4.1. This is a continuation of the previous problem. In addition to the assumption “the per-pound cost
of holding inventory each month is estimated to be 2.2% of the cost of the product”, also assume that
the factory now closes during weekends. Run the solver to optimize model to meet demand and
minimize total cost. Clearly mention the total cost (production + inventory) of your model.
4.2. Can you explain a scenario that is beyond the limits/assumptions of your model?
(5) Assignment 4 – Problem 4 continued… You should already have columns Bin center, PDF and CDF
from frequency calculations. See slides. Calculate and plot the
5.1. PDF of Cost Difference = Outsourcing Cost – Manufacturing Cost and
5.2. CDF of Cost Difference = Outsourcing Cost – Manufacturing Cost.
using the envelop method. Use solver to fit the curves as required (make sure area under PDF = 1).
Explain solver settings in detail.
6. Job scheduling model
6.1. Chapter 14 – Solve problem 21.
6.2. Resolve the problem if Time to complete project 4 is 13 and deadline is 25.
7. Travelling salesman model
7.1. Chapter 14 – Solve problem 22.
7.2. Resolve the problem if you must start from location 8 and end at location 8.
Note: For all assignment problems, show all work. Show all equations in your model. Use CTRL+~ to
display all formulae in your model. Show constraints in solver. Solutions without model equations and
solver setup will not earn points.
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ALY-6050
Week 1 Project
1. This Week 1 Project has 100 points.
2. Solutions should consist of an Excel workbook and a Word document. Please attach both files
when submitting the project.
3. Perform all calculations and analysis In the Excel workbook.
4. In the Word document, write a report summarizing the results obtained in your Excel
workbook.
5. The project will be graded according to the following rubric:
The submission of each weekly project will consist of an Excel workbook and a Word document (an R
script file is optional)– a minimum of two submissions that have been submitted as attachments. For
each weekly project, students should complete their analytic work in an Excel workbook, and write a
minimum of 1000 words in a Word document describing their findings. The Word document should
consist of a title page (including student’s name, assignment title, course number and title, the current
academic term, instructor’s name, and the assignment completion date), and a reference page. The
Word submission of each project will consist of three sections:
(i)
(ii)
(iii)
Introduction
Analysis
Conclusion
The weekly projects will be graded by using the following criteria:
(a) Excel Workbook (60 points)
(i)
Problem set-up and modeling (40%)
(ii)
Problem solution and accuracy (60%)
(b) Word Document (40 points)
(i)
Description of the problem introduction (20%)
(ii)
Description of the problem analysis (30%)
(iii)
Description of conclusion (30%)
(iv)
Writing Mechanics, Title page, and References (20%)
2
Project:
The project consists of four sections. Please complete each section in a separate
worksheet, but in the same workbook. Name your Excel workbook as:
For example: ALY6050-Week1Project-Behboudi-R.xlsx
If using R, you may include your solutions to all four problems in the same R script file. Make
sure that you separate your codes written for each individual problem by writing comments in
the R script file. Save your R script file as:
In the Word document, explain the experiments and their respective conclusions, and
additional information as indicated in each problem below:
In the following set of problems, the notation R is used to refer to a standard uniform random
variable (a continuous random value between 0 and 1) and r is its numerical value.

Problem 1:
Generate 10000 random values r. For each r generated, calculate the random value by:
= − ( ),
where “ “ is the natural logarithm function.
Investigate the probability distribution of the random variable by doing the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Create a relative frequency histogram of .
Select a probability distribution that, in your judgement, is the best fit for .
Support your assertion above by creating a probability plot for .
Support your assertion above by performing a Chi-squared test of best fit with a 0.05
level of significance.
In the word document, describe your methodologies and conclusions.
In the word document, explain what you have learned from this experiment.
Hints and Theoretical Background:
A popular method for generating random values according to a certain probability distribution is to use
the inverse transform method. In this method, the cumulative function of the distribution ( ( )) is
used for such a random number generation. More specifically, a standard uniform random value is
3
generated first. Most software environments are capable of generating such a value. In Excel and R,
functions “=RAND()” and “runif()” generate such a value respectively. After has been created, it
then replaces ( ) in the expression of the cumulative function and the resulting equation is solved for
the variable .
For example, suppose we wish to generate a random value according to the exponential distribution
with a certain mean (say ). The cumulative function for the exponential distribution is:
( ) = −

(The quantity in the above description is called the rate of the exponential random variable and is
denoted by .)
Therefore, to generate a random value that belongs to the exponential distribution with a mean of .
We first generate a standard uniform value , then replace ( ) by in the above expression, and solve
the resulting equation for the variable :
= −

= −
= ( − )
= − ( − )
The formula above means that if is a standard uniform random variable, then the random variable
obtained by the expression = − ( − ) will belong to the exponential distribution with an
average which is equal to the value of . This formula can be simplified as:
= − ( )
(Note that If is a standard uniform random variable, then (1 − ) is also standard uniform.)
A special case of the above formula is when = . This means that a random variable generated by
the formula = − ( ) is an exponential random variable with an average of 1 (or, rate=1).
**************************************************************************************************

Problem 2:
Generate three sets of standard uniform random values , and , each consisting of
10,000 values. Next, Calculate the random value according to the following formula:
= − ( ).
Investigate the probability distribution of the random variable by doing the following:
(i)
(ii)
(iii)
Create a relative frequency histogram of .
Select a probability distribution that, in your judgement, is the best fit for .
Support your assertion above by creating a probability plot for .
4
(iv)
(i)
(ii)
Support your assertion above by performing a Chi-squared test of best fit with a 0.05
level of significance.
In the word document, describe your methodologies and conclusions.
In the word document, explain what you have learned from this experiment.
Hints and Theoretical Background:
This problem is related to a theorem in the probability theory. The theorem states that:
If , , … , are identical and independent exponential random variables each with a mean of , then
the random variable obtained by their sum, that is + + … + , will have a ( , )

probability distribution, where is the shape parameter of the Gamma distribution and = .
From the Hints and Theoretical Background of Problem 1, we know that if is a standard uniform
random variable, then = − ( ) is an exponential random variable with an average of 1. Therefore,
if , , and are three independent standard uniform random variables, then = − ( ) ,
= − ( ) , and = − ( ) are three independent and identical (each with a mean of 1)
exponential random variables. Thus, according to the theorem above, the random variable formed by
their sum, that is (− ( )) + (− ( )) + (− ( )) , will belong to the ( , )
probability distribution.
However algebraically,
(− ( )) + (− ( )) + (− ( )) = −( ( ) + ( ) + ( )) = − ( ).
Therefore, if , , and are three independent standard uniform random variables between zero
and 1, then the random variable formed by the formula = − ( ) will belong to the
( , ) probability distribution.
***************************************************************************************************

Problem 3:
Generate a set of 10,000 pairs of standard uniform random values and . Then perform the
following algorithm for each of these 10000 pairs: Let the output of this algorithm be denoted
by .
Step 1: Generate random values = − ( ) and = − ( ).
Step 2: Calculate =
( − )

. If ≤ , then generate a random number . If > . accept
as (that is, let = ); otherwise if ≤ . , accept − as (that is, let = − ).
If > , no result is obtained, and the algorithm returns to step 1. This means that the algorithm
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Note: The standard normal random value generated by the Rejection algorithm can be used to generate
any normal random value with a mean and a standard deviation . Once a standard normal variable
has been generated, it suffices to evaluate + to generate the desired normal variable.

Problem 4:
In the algorithm of problem #3 above, there are instances when the generated random values
do not satisfy the condition ≥ In order to obtain an acceptable value for . In such cases,
the algorithm returns to step 1 and generates another two values to check for acceptance. Let
be the number of iterations needed to generate of the values ( ≤ ). Let =

.
(For example, suppose that the algorithm has produced 7000 of the values ( = ) after
10,000 iterations ( = , ). Then =

= . . This means that it takes the
algorithm 1.43 iterations to produce one output. In fact, itself is a random variable.
Theoretically, ( ) – the expected value (i.e., average) of – of an algorithm is a measure of
the efficiency of that algorithm.)
Investigate by the following sequence of exploratory data analytic methods:
(i)
(ii)
Estimate the expected value and the standard deviation of .
As the number of iterations becomes larger, the values will approach a certain
limiting value. Investigate this limiting value of by completing the following table and
plotting versus . What value do you propose for the limiting value that
approaches to?
M
10
20
30
40
50
60
70
80
90
100
200
300
400
500
W
8
600
700
800
900
1000
(iii)
(iv)
In the word document, explain what you have learned from this experiment.
*****************************************************************************************
For Problems 1-4,
In the word document, write a summary of the results that you have obtained in the above
three experiments. Try to conceptualize those results and state whether the results of your
experiments are consistent with the theoretical facts that you have reviewed in the Hints and
Theoretical Background sections. In particular, address the following:
(i)
(ii)
(iii)
(iv)
(v)
If is a standard uniform random variable, then − ( ) has the _________
probability distribution.
The sum of th …