# Question

Reconsider Prob. 7.3-4. After further negotiations with each vendor, management of the G.A. Tanner Co. has learned that either of them would be willing to consider increasing their supply of their respective subassemblies over the previously stated maxima (3,000 subassemblies of type A per day and 1,000 of type B per day) if the company would pay a small premium over the regular price for the extra subassemblies. The size of the premium for each type of subassembly remains to be negotiated. The demand for the toy being produced is sufficiently high so that 2,500 per day could be sold if the supply of subassemblies could be increased enough to support this production rate. Assume that the original estimates of unit profits given in Prob. 7.3-4 are accurate.

(a) Formulate and solve a spreadsheet model for this problem with the original maximum supply levels and the additional constraint that no more than 2,500 toys should be produced per day.

(b) Without considering the premium, use the spreadsheet and Solver to determine the shadow price for the subassembly A constraint by solving the model again after increasing the maximum supply by 1. Use this shadow price to determine the maximum premium that the company should be willing to pay for each subassembly of this type.

(c) Repeat part (b) for the subassembly B constraint.

(a) Formulate and solve a spreadsheet model for this problem with the original maximum supply levels and the additional constraint that no more than 2,500 toys should be produced per day.

(b) Without considering the premium, use the spreadsheet and Solver to determine the shadow price for the subassembly A constraint by solving the model again after increasing the maximum supply by 1. Use this shadow price to determine the maximum premium that the company should be willing to pay for each subassembly of this type.

(c) Repeat part (b) for the subassembly B constraint.

## Answer to relevant Questions

Consider the Union Airways problem presented in Sec. 3.4, including the data given in Table 3.19. The Excel files for Chap. 3 include a spreadsheet that shows the formulation and optimal solution for this problem. You are to ...Follow the instructions of Prob. 7.4-2 when considering the following problem and the information provided about its parameters in the table below. Minimize Z = c1x1 + c2x2, subject to the constraints shown at the top of the ...Reconsider the example illustrating the use of stochastic programming with recourse that was presented in Sec. 7.6. Wyndor management now has obtained additional information about the rumor that a competitor is planning to ...After setting goals for how much the sales of three products should increase as a result of an upcoming advertising campaign, the management of the Profit & Gambit Co. now wants to explore the trade-off between advertising ...Use the dual simplex method manually to solve the following problem. Minimize Z = 7x1 + 2x2 + 5x3 +4x4, Subject to and xj ≥ 0, for j = 1, 2, 3, 4.Post your question

0