Question number 3

Using excel solver, solve the following LP problem.

=number of necklaces to be made

= number of bracelets to be made

= number of ear-studs to be made

Maximize Profit (Z) = 70x1 + 30x2 + 15x3

Subject to 7x1 + 3x2 +2x3 <= 60 Maximum availability of gold

2x1 + 4x2 +1x3 <= 60Maximum availability of platinum

x1>=3 Minimum necklace required

x3= 4 Exact ear studs to be produced

(Non-negativity constraint) x1,x2,x3 >=0

Note that fractional values for the variables are acceptable. Use two decimal places to provide answers to questions 4 through 8

1. Generate Input Sheet5 marks

2. Answer report7.5 marks

3. Sensitivity report7.5 marks

Each of the following questions carries six marks5*6=30 marks

4. what is the shadow price of ear stud constraint? What do you understand from this value?

5. The shadow price of gold, __________ (provide gold shadow price) is valid for an increase of up to______units from the current value and decrease of up to ________ units.

6. What is the new profit if the profits from necklace(x1) is increased by $10 and bracelet increased by $10? Show all your steps and explanation

7. What is the new profit if you add 5 units gold and remove (reduce) 5 units of platinum?

8. Given that the supplier charges $2 more per unit of gold from the current charges and $1 less per unit of platinum from the current price. In this case, what is the new profit if you add 5 units gold and remove 5 units of platinum from the current stocks?