Q1) What is the total NET Profits in the optimized model? Round your answers to
ID: 375535 • Letter: Q
Question
Q1) What is the total NET Profits in the optimized model? Round your answers to the nearest penny. Do not include the "$" symbol or commas. For example, a $1,200.05 is entered as 1200.
Q2) The manufacturing manager wants to buy another roasting machine. Based on the Sensitivity Report, determine the net gain or loss if the machine costs $5,000, the full cost is absorbed in this planning cycle, and the optimal production mix does not change. Round your answers to the nearest dollar. Use + for a net gain and - for a net loss. Do not include the "$" symbol or commas. For example, a $1,200.05 decrease is entered as -1200.
Q3) The purchasing manager wants to buy more chocolate. Based on the Sensitivity Report, determine the net gain or loss if it takes her purchasing agent two days to accomplish this task at a cost of $700. Round your answers to the nearest dollar. Use + for a net gain and - for a net loss. Do not include the "$" symbol or commas. For example, a $1,200.05 decrease is entered as -1200.
Q4) The purchasing manager wants to buy more nuts. Based on the Sensitivity Report and other reports, determine how many pounds of nuts should be purchased.
Explanation / Answer
Q1) Total Net Profits = 800*1.6717 + 0*3.2 + 99600*3.4 + 45029*3.6167 = 502833.74
Q2) Based on the sensitivity report, allowable increase for roasting is 8700 minutes and shadow price is 2.067
Therefore, additional machine will add to profit = 8700*2.067 = 17983. Therefore, Net gain = 17983 - 5000 = 12983
Q3) Based on the sensitivity report, allowable increase for chocolates is 320 and shadow price is 1.667
Therefore, additional chocolate will add to profit = 320*1.667 = 533.44. Therefore, there is a net loss = 533.44 - 700 = - 166.56 (negative sign indicates net loss)
Q4) Nuts is not a binding constraint. Therefore, it is not required to purchase any nuts.
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