The Sensitivity Report of Problem 3 is described a follows: (a) If the profit of
ID: 3123722 • Letter: T
Question
The Sensitivity Report of Problem 3 is described a follows: (a) If the profit of Zoomers decreased to $35, would the optimal solution changes? (b) Interpret the shadow price for the labor hours in production ($E$10, Production Time Used). (c) Suppose the company could obtain 180 additional labor hours for production time, what is the profit increase for the new production time constraint? Please provide your calculation. (d) Suppose the company could use overtime to obtain 200 additional pounds of polymer, what is the maximum payment per pound the company would be willing to give for each pound of polymer? Why? (e) Suppose the company wants to increase the production cap ($E$11, Total Production Used) from 900 to 950, how much will the profit increase? Why? (f) Is the optimal solution unique (other than 360 Razors and 480 Zoomers)? Why?Explanation / Answer
Problem 4
a) Yes. The allowable decrease on Zoomer is $ 10 . The decrease of 50-35= $ 15 is more than the allowable decrease, the optimal solution would change.
b) The shadow price for the labour hours in production is $4.
It can be interpreted as follows.
Each additional unit of labour hours in production upto 300 would increse profit by $ 4 and each unit decrease in labour hours in production upto 1200 would decrease profit by $4.
c) The allowable increase on the shadow price $4 for the labour hours in production is 300.
Hence the increase in profit from 180 units of additional labour hpurs = 180 * 4 = $ 720
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.