Need help with items in red.

12-07 (Sensitivity Analysis)

Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times in minutes) required on each machine are as follows: Machine Component Shaper Grinder 1 6 4 2 4 5 3 4 2 The shaper is available for 120 hours, and the grinder for 110 hours. No more than 200 units of component 3 can be sold, but up to 1,000 units of component 1 and up to 1,000 units of component 2 can be sold. In fact, the company already has orders for 600 units of component 1 that must be satisfied. The per unit selling price and per unit variable costs for each of the three components are as follows: Component Selling price Material Cost Labor Cost 1 $25 $12 $5 2 $18 58 $4 3 $27 $13 $5 (a) For each component, calculate the profit margin (profit margin = selling price - material cost - labor cost). Component 1: $ 8 Component 2: $ 6 Component 3: $ 9 Formulate and solve the model to determine the maximum profit. If the constant is "1", it must be entered in the box. If an amount is zero, enter "o". Let C1 = units of component 1 manufactured C2 = units of component 2 manufactured C3 = units of component 3 manufactured Max S Ci 6 C2 s C3 s.t. 6 + C 4 4 s 7200 Shaper 4 C 5 C2 2 C 200 3 6600 Grinder 200 Maximum units of component 3 1000 Maximum units of component 1 1000 C s 1000 C2 5 vo 1000 Maximum units of component 2 1000 Ci 1000 Minimum units of component 1 C1, C2, C3 vo 600 Maximum profit: S