The Porsche Club of America sponsors driver education events that provide high-performance driving instruction on actual race
Max 200DRB + 280DRW
20DRB + 25DRW ¤ 40000 steel available
40DRB + 100DRW ¤ 120000 Manufacturing minutes
60DRB + 40DRW ¤ 96000 Assembly minutes
DRB, DRW ¥ 0
The computer solution is shown in Figure 3.20.
a. What are the optimal solution and the total profit contribution?
b. Another supplier offered to provide Deegan Industries with an additional 500 pounds of the steel alloy at $2 per pound. Should Deegan purchase the additional pounds of the steel alloy? Explain.
c. Deegan is considering using overtime to increase the available assembly time. What would you advise Deegan to do regarding this option? Explain.
d. Because of increased competition, Deegan is considering reducing the price of model DRB such that the new contribution to profit is $175 per unit. How would this change in price affect the optimal solution? Explain.
e. If the available manufacturing time is increased by 500 hours, will the dual value for the manufacturing time constraint change? Explain.
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