paperco.gms : Vertically Integrated Company

**Description**

This is an alternative formulation of the model PAPERCO found in Computational Economics, Chapter 9. This version introduces several sets to partition the equation and variable space into four groups. This example further shows how to implement the suggested scenarios by using a LOOP statement.

**Reference**

- Thompson, G, and Thor, S, Computational Economics: Economic Modeling with Optimization Software. The Scientific Press, San Francisco, 1991.

**Small Model of Type :** LP

**Category :** GAMS Model library

**Main file :** paperco.gms

```
$Title Vertically Integrated Company (PAPERCO,SEQ=102)
$Inlinecom { }
$Ontext
This is an alternative formulation of the model PAPERCO found in
Computational Economics, Chapter 9. This version introduces
several sets to partition the equation and variable space into
four groups. This example further shows how to implement the
suggested scenarios by using a LOOP statement.
Thompson, G, and Thor, S, Computational Economics: Economic Modeling
with Optimization Software. The Scientific Press, San Francisco, 1991.
$Offtext
Sets l log suppliers / company, farmer /
w wood products / ground, chips /
p pulp types / pulp-1, pulp-2 /
q paper types / kraft, newsprint, printing /
Table ap(w,p) pulp manufacturing input requirements
pulp-1 pulp-2
ground .6 .3
chips .4 .7
Table aq(p,q) paper manufacturing input requirements
kraft newsprint printing
pulp-1 .68 .45 .25
pulp-2 .32 .55 .75
Table cw(w,p) wood shipment cost
pulp-1 pulp-2
(ground
chips ) 40 55
Table cp(p,q) pulp shipment cost
kraft newsprint printing
pulp-1 40 60 70
pulp-2 55 50 45
Table sdat(q,*) sales data
lower upper
kraft 18 25
newsprint 12 15
printing 0 7
Parameter pq(q) sales price / kraft 265, newsprint 275, printing 310 /
pp(p) price of pulp
pc(w) / ground 18, chips 16 /
Scalar plog / 65 /
Positive Variables
logs(l) purchases of logs (tons)
xw(w,p) shipments of wood products (tons)
pulp(p) production of pulp (tons)
xp(p,q) shipments of pulp (tons)
paper(q) production and sales of paper products (tons)
sales(p) sales of pulp (tons)
purchase(p) purchase of pulp (tons)
Variables
profit net operating income
Equations
logbal
wbal(w,p)
pbal(p)
qbal(p,q)
obj;
logbal.. .97*sum(l, logs(l)) =e= sum((w,p), xw(w,p));
wbal(w,p).. xw(w,p) =e= ap(w,p)*pulp(p);
pbal(p).. sum(q, xp(p,q)) =e= purchase(p) - sales(p) + pulp(p);
qbal(p,q).. xp(p,q) =e= aq(p,q)*paper(q);
obj.. profit =e= sum(p, pp(p)*sales(p)) { sales of pulp }
+ sum(q, pq(q)*paper(q)) { sales of paper }
- sum(l, plog*logs(l)) { cost of logs }
- sum((p,q), cp(p,q)*xp(p,q)) { transport cost of pulp }
- sum((w,p), (cw(w,p)+pc(w))*xw(w,p)) { transport cost of wood }
- sum(p, pp(p)*purchase(p));
Model wood / all /;
paper.lo(q) = sdat(q,'lower');
paper.up(q) = sdat(q,'upper');
Set scenario scenario identifier / scenario-1*scenario-3 /
Table psdat(scenario,p,*) bounds on pulp trade (tons)
pulp-1.s pulp-1.p pulp-2.s pulp-2.p
scenario-1
scenario-2 3 5 3 5
scenario-3 6 6 10 10
Table ppdat(scenario,p) price data for pulp trade ($ per tons)
pulp-1 pulp-2
scenario-1 120 140
scenario-2 120 140
scenario-3 120 150
Loop(scenario,
purchase.up(p) = psdat(scenario,p,'p');
sales.up(p) = psdat(scenario,p,'s');
pp(p) = ppdat(scenario,p);
Solve wood maximizing profit using lp;
Option limcol=0, limrow=0 ; );
```