Managerial

IE 497B Fall 2007

A. Ravindran

Homework 5

(Due Oct. 19)

Problem 1

Mid-Atlantic Bus Lines was founded by a group of managers from Trailways when that company was acquired by Greyhound. They launched a first-class, express bus service operating between the major coastal cities from Philadelphia, Pennsylvania, to Jacksonville, Florida. By hiring laid-off Trailways drivers and leasing buses, they established franchises in each city with local entrepreneurs, who were given the right to operate Mid-Atlantic bus terminal. A percentage of the passenger ticket sales and freight sales would be kept by the terminal operator to cover his or her costs and profit.

After several months of the operation, some franchisees complained about inadequate profits and threatened to close their terminals. Because other franchises were pleased with their experiences, however, a study of all terminal operations in the system was undertaken. The information in Table 1 was collected over several weeks and represents typical day’s operation.

Question

Use DEA to identify efficient and inefficient terminal operations. Formulate the problems as linear programming models, and solve using Excel Solver.

(Note: Attach the Solver outputs for each bus depot).

Table 1 Outputs and Inputs for Mid-Atlantic Bus Lines

|Bus Depot |City Served |Ticket Sales |Freight Sales |Labor-Hours |Facility Dollars |

|1 |Philadelphia, Pa. |700 |300 |40 |500 |

|2 |Baltimore, Md. |300 |600 |50 |500 |

|3 |Washington, D.C. |200 |700 |50 |400 |

|4 |Richmond, Va. |400 |600 |50...