Solved Problem:

Problem #1
The computerized solution of a given problem is given below:

Sensitivity Analysis: Objective function:

Variable Final Reduced Objective Allowable Allowable

Value Cost Coefficient Increase Decrease
M 25 0 90 1E+30 6
B 425 0 84 6 34
R 150 0 70 17 1E+30
D 0 -45 60 45 1E+30

Sensitivity Analysis: Right hand side:

Constraints Final Shadow Constraint Allowable Allowable

Value Price R.H. Side Increase Decrease
1 5000 3 5000 850 50
2 1775 0 1800 1E+30 25
3 600 60 600 3.571428571 85
4 150 -17 150 50 150

Answer the following questions:

a) Should manager increase the capacity of resource 1 by 100 units if the cost of such a
change is Tk. 200? Why or why not?
b) What will be the change in objective value if resource 1 is increased by 1000 units?
c) If it cost Tk. 300 to increase 1 unit of resource 1 and Tk. 5000 to increase 1 unit of
resource 3, which resource will get the priority, considering enough money is available?
Why or why not?
d) The Price of 1 unit of product D is Tk. 90. What should the product sell for in order to be
included in the solution?
e) Which constraints are fully utilized? What is the utilization (in percent) of resource 2?
f) Whether there will be a change or not in the optimum solution, if the profit of 1 unit of
product M is Tk. 80? Tk. 110?
Solution:
a) The allowable increase of resource 1 is up to 850 from its current level and shadow price
(Unit worth of resource) for per unit increase is 3. So increasing resource 1 by 100 units will
contribute 3X100 = Tk. 300 to the profit at a cost of Tk. 200 only. So management should
increase the capacity of resource 1 by 100 units.

b) The allowable increase of resource 1 is up to 850 from its current level. So increasing this
resource by 1000 units will make the resource abundant. So contribution to profit for such a
change will be 850X3= Tk. 2550.

c) If fund is available, then we should go for increasing the resource that will contribute the
most to the total profit.
Resource 1: 850X3= Tk. 2550
Resource 2: 3.571428571X60= Tk. 214.29. Here, resource 1 will be the choice.

If fund is not sufficient, then we should go for increasing the resource that will contribute the
most on per taka basis. (Contribution/Cost)

Resource 1: 3/300 = .01

Resource 2: 60/1200 = .012. Here, resource 2 will be the choice.

d) The product should sell for Tk.(90 + 45) = Tk. 135 in order to be included in the optimum
solution. Product D is a non basic variable in the optimum solution. Its reduce cost -45.00
indicates that it has less contribution to the profit by Tk.45.00. So selling price should be
increased by Tk. 45.00.

e) Resource 1, 3 and 4 are fully utilized. (These 3 resources have shadow price other than
zero)
The utilization of resource 2 is 1775/1800 = 98.61%.

f) The profit range of M within which current solution will remain optimum is:
Upper limit: Infinity to Lower limit: 90-6 = 84.
So, when profit will change to Tk. 110, current solution will remain optimum. But when profit
will change to Tk. 80, current solution will change (since it is outside the range).
Problem#2

Tucker Inc. produces high-quality suits and sport coats for men. Each suit
requires 1.2 hours of cutting time and 0.7 hours of sewing time, uses 6 yards of
material, and provides a profit contribution of $190. Each sport coat requires 0.8
hours of cutting time and 0.6 hours of sewing time, uses 4 yards of material, and
provides a profit contribution of $150. For the coming week, 200 hours of cutting
time, 180 hours of sewing time, and 1200 yards of fabric are available.
Additional cutting and sewing time can be obtained by scheduling overtime for
these operations. Each hour of overtime for the cutting operation increases the
hourly cost by $15, and each hour of overtime for the sewing operation
increases the hourly cost by $10. A maximum of 100 hours of overtime can be
scheduled. Marketing requirements specify a minimum production of 100 suits
and 75 sport coats. Let

The computer solution is shown in the following Figure.

a. What is the optimal solution, and what is the total profit? What is the plan for
the use of overtime?

b. A price increase for suits is being considered that would result in a profit
contribution of $210 per suit. If this price increase is undertaken, how will the
optimal solution change?

c. Discuss the need for additional material during the coming week. If a rush
order for material can be placed at the usual price plus an extra $8 per yard for
handling, would you recommend the company consider placing a rush order for
material? What is the maximum price Tucker would be willing to pay for an
additional yard of material? How many additional yards of material should
Tucker consider ordering?

d. Suppose the minimum production requirement for suits is lowered to 75.

Would this change help or hurt profit? Explain.
FIGURE THE SOLUTION FOR THE TUCKER INC. PROBLEM

Sensitivity Analysis: Objective function:

Reduc Objecti Allowabl

Variable Final ed ve e Allowable
Coeffici
Name Value Cost ent Increase Decrease
S 100 0 190 35 1E+30
23.333333
SC 150 0 150 1E+30 33
D1 40 0 -15 15 172.5
D2 0 -10 -10 10 1E+30

Sensitivity Analysis: Right hand side Sensitivity

Shado Constra Allowabl
Constraints Final w int e Allowable
R.H.
Value Price Side Increase Decrease
1 200 15 200 40 60
2 160 0 180 1E+30 20
133.3333
3 1200 34.5 1200 333 200
4 40 0 100 1E+30 60
5 100 -35 100 50 100
6 150 0 75 75 1E+30

ANSWER

a. The optimal solution calls for the production of 100 suits and 150 sport coats. Forty hours
of cutting overtime should be scheduled, and no hours of sewing overtime should be
scheduled. The total profit is $40,900. (190X100+150X150-40X15).

b. The objective coefficient range for suits shows and upper limit of $225. Thus, the optimal
solution will not change. But, the value of the optimal solution will increase by ($210-
$190)100 = $2000. Thus, the total profit becomes $42,990.

c. The slack for the material coefficient is 0. Because this is a binding constraint, Tucker
should consider ordering additional material. The dual price of $34.50 is the maximum extra
cost per yard that should be paid. Because the additional handling cost is only $8 per yard,
Tucker should order additional material. Note that the dual price of $34.50 is valid up to
1333.33 -1200 = 133.33 additional yards.

d. The dual price of -$35 for the minimum suit requirement constraint tells us that lowering
the minimum requirement by 25 suits will improve profit by $35(25) = $875.
Problem#3

The computer solution is shown in the following Figure.

a. What is the optimal solution, and what is the value of the objective function?

b. Which constraints are binding?

c. Which constraint shows extra capacity? How much?

d. If the profit for the deluxe model were increased to $150 per unit, would the optimal
solution change?

e. Identify the range of optimality for each objective function coefficient.

f. Suppose the profit for the economy model is increased by $6 per unit, the profit for the
standard model is decreased by $2 per unit, and the profit for the deluxe model is increased
by $4 per unit. What will the new optimal solution be?

g. Identify the range of feasibility for the right-hand-side values.

h. If the number of fan motors available for production is increased by 100, will the dual
value for that constraint change? Explain.

FIGURE: THE SOLUTION FOR THE QUALITY AIR CONDITIONING

PROBLEM

Sensitivity Analysis: Objective function:

Varia Fin Reduc Objecti Allowa Allowa
ble al ed ve ble ble
Val Coeffici Increas Decrea
Name ue Cost ent e se
E 80 0 63 12 15.5
S 120 0 95 31 8
D 0 -24 135 24 1E+30

Sensitivity Analysis: Right hand side Sensitivity

Fin Shado Constra Allowa Allowa

Constraints al w int ble ble
Val R.H. Increas Decrea
ue Price Side e se
1 200 31 200 80 40
2 320 32 320 80 120
208
3 0 0 2400 1E+30 320
Solution:

a. E = 80, S = 120, D = 0, Profit = $16,440.

b. Fan motors and cooling coils

c. Labor hours; 320 hours available.

d. Objective function coefficient range of optimality: No lower limit to 159 (135+24). Since $150 is in this range,
the optimal solution would not change.

e. Range of optimality:
E 47.5 to 75
S 87 to 126
D No lower limit to 159.
f.

g. Range of feasibility
Constraint 1 160 to 180
Constraint 2 200 to 400
Constraint 3 2080 to No Upper Limit

h. Yes, fan motors = 200 + 100 = 300 is outside the range of feasibility. The dual price will change.
Assignment:
Main Text: Anderson sweeney Management science, Page no 131 and onward

Problem no: 14, 15

Problem # 3

The Porsche Club of America sponsors driver education events that provide high
performance driving instruction on actual race tracks. Because safety is a primary
consideration at such events, many owners elect to install roll bars in their cars.
Deegan Industries manufactures two types of roll bars for Porsches. Model DRB is
bolted to the car using existing holes in the cars frame. Model DRW is a heavier roll
bar that must be welded to the cars frame. Model DRB requires 20 pounds of a
special high alloy steel, 40 minutes of manufacturing time, and 60 minutes of
assembly time. Model DRW requires 25 pounds of the special high alloy steel, 100
minutes of manufacturing time, and 40 minutes of assembly time. Deegans steel
supplier indicated that at most 40,000 pounds of the high-alloy steel will be
available next quarter. In addition, Deegan estimates that 2000 hours of
manufacturing time and 1600 hours of assembly time will be available next quarter.
The profit contributions are $200 per unit for model DRB and $280 per unit for
model DRW. The linear programming model for this problem is as follows:

The computer solution is shown in the following Figure.

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.
FIGURE THE SOLUTION FOR THE DEEGAN INDUSTRIES PROBLEM

Sensitivity Analysis: Objective function:

Reduc Objecti Allowabl Allowabl

Variable Final ed ve e e
Valu Coeffici
Name e Cost ent Increase Decrease
DRB 1000 0 200 24 88
DRW 800 0 280 220 30

Sensitivity Analysis: Right hand side Sensitivity

Constrai Shado Constra Allowabl
nts Final w int e Allowable
Valu R.H.
e Price Side Increase Decrease
4000 909.0909
1 0 8.8 40000 091 10000
1200
2 00 0.6 120000 40000 5714.285714
9200
3 0 0 96000 1E+30 4000

Problem #4
A large sporting goods store is placing an order for bicycles with its supplier.
Four models can be ordered: the adult Open Trail, the adult Cityscape, the
girl's Sea Sprite, and the boy's Trail Blazer. It is assumed that every bike
ordered will be sold, and their profits, respectively, are 30, 25, 22, and 20.
The LP model should maximize profit. There are several conditions that the
store needs to worry about. One of these is space to hold the inventory. An
adults bike needs two feet, but a child's bike needs only one foot. The store
has 500 feet of space. There are 1200 hours of assembly time available.
The child's bike need 4 hours of assembly time; the Open Trail needs 5 hours
and the Cityscape needs 6 hours. The store would like to place an order for
at least 275 bikes.
a. Formulate a model for this problem.
b. Solve your model with any computer package available to you.
c. How many of each kind of bike should be ordered and what will
the profit be?
d. What would the profit be if the store had 100 more feet of
storage space?
e. If the profit on the Cityscape increases to $35, will any of the
Cityscape bikes be ordered?
f. Over what range of assembly hours is the dual price applicable?
g. If we require 5 more bikes in inventory, what will happen to the
value of the optimal solution?
h. Which resource should the company work to increase, inventory
space or assembly time?