A company produces two products using three raw materials. I-he company has a limited amount of...

 

Transcribed Image Text:

A company produces two products using three raw materials. I-he company has a limited amount of raw materials for next week production. Production manager of the company has used linear programming to find the product mix which maximizes the profit. Following is the sensitivity report of spread sheet formulation. Adjustable Cells Name $C$12 Product 1 Constraints 'Units Produced Cell $E$7 $D$12 Product 2 Units Produced Name Material 1 Used Final Reduced Objective Value 4 12 Final Value 4 24 Allowable Allowable Cost Coefficient Increase Decrease 36 0 0 Shadow Price 0 150 300 500 R.H. Side 8 450 24 36 IE+30 Constraint Allowable Allowable Decrease Increase 1E+30 $E$8 Material 2 Used $E$9 Material 3 Used 100 a) What is the maximum unit profit of product I that does not change the existing optimal product mix? 300 12 300 12 4 12 12 b) If the company has a limited amount of money to buy additional raw materials, which raw material should they buy first? Give reasons for your answer. A company produces two products using three raw materials. I-he company has a limited amount of raw materials for next week production. Production manager of the company has used linear programming to find the product mix which maximizes the profit. Following is the sensitivity report of spread sheet formulation. Adjustable Cells Name $C$12 Product 1 Constraints 'Units Produced Cell $E$7 $D$12 Product 2 Units Produced Name Material 1 Used Final Reduced Objective Value 4 12 Final Value 4 24 Allowable Allowable Cost Coefficient Increase Decrease 36 0 0 Shadow Price 0 150 300 500 R.H. Side 8 450 24 36 IE+30 Constraint Allowable Allowable Decrease Increase 1E+30 $E$8 Material 2 Used $E$9 Material 3 Used 100 a) What is the maximum unit profit of product I that does not change the existing optimal product mix? 300 12 300 12 4 12 12 b) If the company has a limited amount of money to buy additional raw materials, which raw material should they buy first? Give reasons for your answer.

Answer rating: 100% (QA)

This image depicts a sensitivity report from a linear programming model which is a summary of the op... View the full answer