# Simulation - Coast-to-Coast Airlines

Coast-to-Coast Airlines is investigating the possibility of reducing the cost of fuel purchases by taking advantage of lower fuel costs in certain cities. since fuel purchases represent a substantial portion of operating expenses for an airline, it is important that these costs be carefully monitored. however, fuel adds weight to an airplane, and consequently, excess fuel raises the cost of getting from one city to another. in evaluating one particular flight rotation, a plane begins in Atlanta, flies from atlanta to los angeles, from los angeles to houston, from houston to new orleans, and from new orleans to atlanta. when the plane arrives in atlanta, the flight rotation is said to have been completed, and then it starts again. thus, the fuel on board when the flight arrived in atlanta must be taken into consideration when the flight begins. along each leg of this route, there is a minimum and a maximum amount of fuel that may be carried. this and additional information is provided in the table on this page.
the regular fuel consumption is based on the plane carrying the minimum amount of fuel. if more than this is carried, the amount of fuel consumed is higher. specifically, for each 1,000 gallons of fuel above the minimum, 5% (or 50 gallons per 1,000 gallons of extra fuel) is lost due to excess fuel consumption. for example, if 25,000 gallons of fuel were on board when the plane takes off from atlanta, the fuel consumed on this route would be 12+0.05=12.05 thousand gallons. if 26 thousand gallons were on board, the fuel consumed would be increased by another 0.05 thousand, for a total of 12.1 thousand gallons.
Formal ate this as an LP problem to minimize the cost. how many gallons should be purchased in each city? what is the total cost of this?

Leg Minimum fuel maximum fuel regular fuel Fuel price
required (1,000 GAL.) allowed (1,000GAL.) consumption(1,000GAL.) per Gallon

Atlanta-LA 24 36 12 \$1.15
LA-Houston 15 23 7 \$1.25
Houston-NO 9 17 3 \$1.10
NO-Atlanta 11 20 5 \$1.18

What i need are followings..

1. definitions of decision variables.(in word)

2.Full formulations (outside printout)
include nonnegativity if appropriate

3.prints out- answers, sensitivity and limit pages (attach the actual prints out, do not retype)

4. yes/no comments on 4 assumptions. (one sentence. justification each)

5. using the numbers from the excel printout
a. explanation of a nonzero reduced cost
b. similarly, a nonzero marginal value (dual value)
c. similarly, a nonzero slack or surplus value
d. similarly, an objective coefficient range
e. similarly, a right hand side range

6. detailed recommendations for the airline.

Hint: 1.Define decision variables for the amount of fuel purchased at each of the four location.

2. you will probably need some additional decision variables also.

3. there are only two types of constraints (apart from nonnegativity). the first type enforces the minimum and maximum amount of fuel at each take-off. The second type models the use of fuel during each flight, and is similar to the inventory balance equation used to model the multi-period production planning problem.

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Rajender Kumar, MCom

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B.Com, University of Ajmer
M.Com, University of Ajmer

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