A. As the profit for Speedbuster is higher, till the point the profit of Laserst

Question

A.

As the profit for Speedbuster is higher, till the point the profit of Laserstop does not match Speedbuster, the cost reduction that allows for the item to be produced is 0. (So it is produced at the current price point hence reduced cost is 0).

B.

The units remain the same:

Laserstop 0

Speedbuster 333.33

The profit = 333.33*35

C.

If price increases to 64, so the increase of 44 >36, hence it is the only product produced.

Hence from the below 222.22 laserstop to be produced.

Profit = 222.22*64= 14222.22

D.

In the new situation: 350 units can be produced.

So Speedbuster: 350 and profit = 350*40 = 14000

E.

It will not affect the solution and it does not change as, the current limit is at 333.33 units of speedbuster,using 3333.33 units of B, so 3400 units are enough.

Explanation / Answer

Figure shows the Solver sensitivity report for Valencia Products in Problem. Using only the information in the sensitivity report, answer the following questions a. Explain why the reduced cost for SpeedBuster is 0 b. If the unit profit for SpeedBuster is decreased to $35, can you predict how the optimal solution and profit wll change? c. If the unit profit for LaserStop is increased to $64, can you predict how the optimal solution and profit will change? d. If an additional 500 units of component A are available, can you predict how the optimal solution and profit will be affected? e. If a supplier delay results in only 3,400 units of component B available, can your predict how the optimal solution and profit will be affected? Figure Sensitivity Report for Valencia Products A B Final Value TOTAL PROFIT 0 Decsion Variable Cell ReducedObjective Allowable Allowable Cost Coefficlent Increase Decrease 12 Cell 13 | $8511 Numbers Produced LaserStop 0.00 333.33 36.00 0.00 24 36 E+30 15 16 Constraints 17 18 Cell 19 $0514 Component A Used Finel Shadow Constraint Allowable Allowable R.H. Side Increase Decrease Price 4000 3.333333333 4000 1500 1E+30 166.6666667 1s 8 Used Problem Valencia Products makes automobile radar detectors and assembles two models LaserStop and SpeedBuster. The firm can sell all it produces. Both models use the same electronic components. Two of these can be obtained only from a single supplier. For the next month, the supply of these is limited to 4,000 of component A and 3,500 of component B. The number of each component required for each product and the profit per unit are given in the table Components Required/Unit A B Profit/unit LaserStop 18 6 $24 SpeedBuster 12 10 $40

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