Question

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 perma-nent 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 processesatleast 450 claims each day. The company has 40 computer workstations. A permanent operatorgenerates about 0.5 claim with errors each day,whereas a temporary operator averages about1.4defective claims per day. The company wants to limit claims with errors to 25 per day. A per-manent operator is paid $64 per day,and a temporary operator is paid $42 per day. The companywants to determine the number of permanent and temporary operators to hire in order tominimize costs.

(a) Solve the linear programming model we developed as part of assignment 1 using graphical method.

(b) Interpret the slack/surplus variables that you obtain based on the optimal values of decision variables in (a).

(c) Are there any binding constraints in the model? Explain.