EXCEL SOLVER TUTORIAL

Many firms face the problem of how to best use multiple scarce resources. Linear programming is

designed to help find the product mix that maximizes profits in the short run when multiple

constraints exist. While linear programming can be solved as a mathematical problem using pencil

and paper, it is much more efficient to use Excel Solver. The key to using Excel Solver is to make

certain you have modeled the problem correctly and then interpreted the results appropriately. In

this problem we will practice the use of Solver.

In this example suppose that you manufacture regular and premium golf carts. The selling price,

variable costs and manufacturing times are as follows:

Regular Premium

SALES PRICE $ $8,000$ $ $10,000$

VARIABLE COST $5,6006,500$

CONTRIBUTION MARGIN $ $2,400$ $ $3,500$

Assembly hours $2050$

Inspect and Test $5\mathrm{.}02\mathrm{.}5$

Your company currently has $10,000$ hours available for assembly and $1,200$ hours for inspection and

testing. There is also a limit to how many premium golf carts that can be sold $(150$ max$).$ Given

this information if you want to maximize profits what mix of regular and premium golf carts should

you produce?