Question 3-A and 3-B Problem 3: Union Bank 1 2 3 4 Microsoft Excel 16.0 Sensitiv

Question

Question 3-A and 3-B

Problem 3: Union Bank 1 2 3 4 Microsoft Excel 16.0 Sensitivity Report Worksheet: [EXAM 1 excel.xisx]Union Bank Report Created: 6/25/2017 10:15:01 PM Engine: Standard LP/Quadratic Cell 3-a. How will raising the investment of car loans to Cell Name Final Value 8 SC$9 Total $ Return 66.625 its allowable increase affect the objection function total? 0 Decision Variable Cells 2 Cell 13 SDS5 Bonds Amnt Invested in $1000s 4 SDS6 Mortgages Amnt Invested in $1000s 5 SD$7 Car Loans Amnt Invested in $1000s 6 SD58 Personal Loans Amnt Invested in $1000s Final Reduced Objective Allowable Allowable Value Cost Coefficient Increase rase3-b. If personal loans constraint were loosened, 325.000 0.000 162.500 0.000 Name 0.1 0.00500005 0.0050001 0.085 0.0150001 0.0100001 1E+30 E430 0.0100001 how will the current solution be affected? 0.000 -0.005 0.095 0.005 Analyze and Explain 162.500 0.000 0.125 8 Constraints Final Shadow Constraint Allowable Allowable Value Price Cell SFSS Bonds Personal Loans Name R.H. Side ncreaseDecrease 2 $FS8 Personal Loans Personal Loans 3 SF$11 Personal Loans 4 SDS9 Total $ Amnt Invested in $1000s 162.500 0000 162.5 0.015 0.01 650.00 0.10 E+30 162.5 162.5 54.16666667 E 30 162.5 162.5 162.5 650

Explanation / Answer

3 a)

As we can see in Decision variable cells output ,Final value of car loans Amount invested is zero with coefficeint of 0.095

So in optimal solution for objective function total return doest depend on car loans anount invested till its allowable increase.

Raising the investement of car loans till its allowable increase will have no impact on optimal solution with no value of car loans investement and hence no affect on objective function .

3-b.

In contraints output of solver we can see shadow price of cell $F$11 personal loans is 0.01 that means with 1 unit change in personla loans the objective function will change by 0.01 unit till its allowable increase and allowable decrease. Current solution will in decrease by 0.01 with each unit decrease of personal loans till its allowable decrease of 162.5.

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