Consider the Flair Furniture example from Sections 4.2 and 4.3. Suppose that the company is considering the option of making stools in addition to its tables and chairs. Stools take 1 hour of carpentry time and 0.5 hours of painting time. Each hour of carpentry time costs $20, and each hour of painting time costs $15. With the help of Figure 4.11 and using hand calculations, what would the minimum selling price of stools need to be to make offering them worthwhile financially?

 

Figure 4.11

Transcribed Image Text:

Microsoft Excel 14.0 Sensitivity Report Worksheet: [Figure 4.9.xlsx]Flair Furniture The shadow prices ere valid for this range of change in Variable Cells Two components of the Sensitivity Report Cell SBS5 Number of units Tables 320,00 SCS5 Number of units Chairs Final Reduced Objective Allowable Allowable the RHS values. Value Coefficient Increase Decrease 7.00 5.00 Name Cost 0.00 3.00 360.00 3.25 1.50 0.00 4.33 Constraints Final Shadow Constraint Allowable Allowable Name SD$8 Carpentry hours SDS9 Painting hours SDS 10 Maximum chairs SDS11 Minimum tables R.H. Side Increase Decrease 225.00 600.00 Cell Value 2400.00 Price 0.60 2400.00 900.00 1000.00 2.60 1000.00 150.00 360.00 320.00 1E+30 220.00 0.00 450.00 90.00 1E+30 0.00 100.00 The shadow price for a nonbinding constraint is zero. Solver's way Each additional hour of painting time will increase profit by $2.60. of showing infinity