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2. The Wyndor Glass Co. is a glass manufacturer which uses three production plants to

assemble its products. Let x1 and x2 be the number of batches of glass doors and wooden frame

windows to produce each week, respectively. Each product requires different times in the three

plants and there are certain restrictions on available production time at each plant. With this

information and a knowledge of contributions to profit of the two products, management of the

company wishes to determine what quantities of each product they should be producing in order

to maximize profit. The linear programming formulation for the problem and the solution from

Microsoft Excel Premium Solver are provided below.

Maximize Z = 30,000 x1 + 50,000 x2

Subject To 100 x1 400 Plant One Production Capacity

200 x2 1,200 Plant Two Production Capacity

300 x1 + 200 x2 1,800 Plant Three Production Capacity

x1, x2 0

Microsoft Excel 12.0 Answer Report

Worksheet: [Wyndor Glass Co.xls]Sheet1

Report Created: 11/03/2008 13:21:49 PM

Result: Solver found a solution. All constraints and optimality conditions are satisfied.

Engine: Standard LP Simplex

Solution Time: 00 Seconds

Iterations: 2

Subproblems: 0

Incumbent Solutions: 0

Target Cell (Max)

Cell Name Original Value Final Value

$B$20 Total Profit Amount 0 360000

Adjustable Cells

Cell Name Original Value Final Value

$B$12 Optimal Quantity Glass Doors 0 2

$C$12 Optimal Quantity Wooden Frame Windows 0 6

Constraints

Cell Name Cell Value Formula Status Slack

$B$16 Plant One Production Capacity Amount 200 $B$16<=$D$6 Not Binding 200

$B$17 Plant Two Production Capacity Amount 1200 $B$17<=$D$7 Binding 0

$B$18 Plant Three Production Capacity Amount 1800 $B$18<=$D$8 Binding 0

Worksheet: [Wyndor Glass Co.xls]Sheet1

Report Created: 11/03/2008 13:21:49 PM

Target Cell (Max)

Cell Name Final Value

$B$20 Total Profit Amount 360000

Adjustable Cells

Final Reduced Objective Allowable Allowable

Cell Name Value Cost Coefficient Increase Decrease

$B$12 Optimal Quantity Glass Doors 2 0 30000 45000 30000

$C$12 Optimal Quantity Wooden Frame Windows 6 0 50000 1E+30 30000

Constraints

Final Shadow Constraint Allowable Allowable

Cell Name Value Price R.H. Side Increase Decrease

$B$16 Plant One Production Capacity Amount 200 0 400 1E+30 200

$B$17 Plant Two Production Capacity Amount 1200 150 1200 600 600

$B$18 Plant Three Production Capacity Amount 1800 100 1800 600 600

a. A batch of glass doors consists of 200 units and a batch of wooden frame windows consists of 330

units. How many glass doors and wooden frame windows should Wyndor schedule for production each

week? What is the expected profit if they follow this schedule?

x1*=2 Batches x 200 Units/Batch = 400 Glass Doors

x2*=6 Batches x 330 Units/Batch = 1,980 Wooden Frame Windows Z*=360,000

b. Plant One is in Lubbock, TX and unemployment has skyrocketed to the extent that Wyndor can now

increase production capacity with inexpensive labor at or even a bit below the hourly state minimum

wage. How much additional capacity should they seek to obtain? Support your answer well.

None. Plant One capacity is a non-binding constraint with slack of 200 units of capacity. Wyndor is

not using all it currently has. The Plant One Shadow Price = 0 and thus paying anything for

additional capacity will not result in any increase in Z*.

c. Because of a nation-wide sales promotion, Wyndor is projecting that profit for a batch of wooden

frame windows will soon change to $17,500. What would happen to the production amounts should this

occur? Why? Support your answer well. The range of optimality for the profit for a batch of

wooden frame windows is: 20,000 c2 . Since 17,500 falls outside this range, the current optimal

solution would no longer be optimal and the problem would need to be resolved.

d. Plant Two is in Lima, OH and Wyndor is able to obtain 400 units of additional production capacity at

$90/unit. Should they indeed secure any of these 400 units? Why or why not? If yes, what would

happen to profit? The Plant Two capacity constraint is binding and has a Shadow Price = $150, so

yes, we should purchase additional units at $90/unit. The range of optimality for the Plant Two

capacity constraint right-hand-side is 600 RHS2 1,800. Since the increase of 400 units is < the

Allowable Increase of 600 and thus inside the range we would buy all 400 units of additional

capacity. Profit would increase by ($150-$90)x400=$24,000 to $384,000.

e. How much production capacity will be used at the plants? According to this analysis, which plants

are ones that Wyndor should examine more closely? Why? Support your answer well.

Plants One, Two, and Three will use 200, 1,200, and 1,800 units of production capacity, respectively.

Wyndor should be more concerned with the two binding constraints and look to increase capacity at

Plants Two and Three.

3. Duke Energy has a new plant in Williamstown, Ohio and is hiring Clerical/Secretarial (CS),

Skilled Technicians (ST), and Line Managers (LM) that cost $12, $18, and $24 per hour,

respectively. For every two STs, at least one CS worker is needed. Ohio regulations require at least

1,000 new hires. To have enough employees to properly operate the plant, at least 400 CSs and at

least 400 STs must be hired. The number of new LMs must exceed or equal 100 to be able to

properly control the facility. The Personnel Department estimates that there are no more than 500

qualified STs willing to apply.

Let xj= The number of level j personnel to hire for the facility, j=1 CS, j=2 ST, j=3 LM

Subject To 2x1 x2 0

x1 + x2 + x3 1,000

x1 400

x2 400

x3 100

x2 500

x1, x2, x3 0

Microsoft Excel 12 Answer Report:

Duke Energy

Target Cell (Min)

Original Final

Cell Name Value Value

$B$

16 Total Cost 0 15600

Adjustable Cells

Original Final

Cell Name Value Value

$B$

7 Clerical/Secretarial 0 500

$C$

7 Skilled Technician 0 400

$D$

7 Line Managers 0 100

Constraints

Slac

Cell Name Cell Value Formula Status k

$B$ Balance Clerical/Secretarial Skilled Not

9 Technician 600 $B$9>=0 Binding 600

$B$ $B$10>=$

10 Ohio Regulation 1000 F$3 Binding 0

$B$ $B$11>=$ Not

11 Clerical/Secretarial Needs 500 F$4 Binding 100

$B$ $B$12>=$

12 Skilled Technician Needs 400 F$4 Binding 0

$B$ $B$13>=$

13 Line Manager Needs 100 F$5 Binding 0

$B$ $B$14<=$ Not

14 Skilled Technician Available 400 F$6 Binding 100

Microsoft Excel 12.0 Sensitivity

Report

Adjustable Cells

Fina Reduc Objectiv Allowab Allowab

l ed e le le

Valu Coefficie Increas Decreas

Cell Name e Cost nt e e

$B$

7 Clerical/Secretarial 500 0 12 6 12

$C$

7 Skilled Technician 400 0 18 1E+30 6

$D$

7 Line Managers 100 0 24 1E+30 12

Constraints

Fina Shado Constrai Allowab Allowab

l w nt le le

Valu R.H. Increas Decreas

Cell Name e Price Side e e

$B$ Balance Clerical/Secretarial Skilled

9 Technician 600 0 0 600 1E+30

$B$

10 Ohio Regulation 1000 12 1000 1E+30 100

$B$

11 Clerical/Secretarial Needs 500 0 400 100 1E+30

$B$

12 Skilled Technician Needs 400 6 400 100 400

$B$

13 Line Manager Needs 100 12 100 100 100

$B$

14 Skilled Technician Available 400 0 500 1E+30 100

a. How many of each level worker should Duke hire? What will it cost in total for an 8-hour day?

Clerical/Secretarial x1*=500; Skilled Technicians x2*=400; Line Managers x3*=100

Total Cost for 8-Hour Day=$15,600/Hour x 8 Hours = $124,800

b. Duke managers suspect the union for CS workers will force wages up. The Personnel

Department projects the increase may be to $15/hour but the Duke Board wants to be cautious and

assumes they would cost $21/hour. What would happen to the solution and total cost under each

increase?

Range for the Objective Coefficient for CS: 0c118. If the Personnel Department is correct,

since $15 is inside the range, the exact same x1*=500, x2*=400, and x3*=100. The Total Cost

will increase by ($15-$12)(500)=$1,500 and will become $17,100/Hour. If the Duke Board is

correct, since $21 is outside the range, the current solution is no longer optimal and the problem

must be resolved. All we can say at this point is that Total Cost will increase.

c. Duke thinks they can get the Ohio regulation reduced to 950. What would happen to the solution

and total cost if that occurred (and all other binding constraints could also be addressed at break-

even)? The range for the right-hand-side of the Ohio regulation constraint, the 2nd

constraint, is: 900RHS2. Since 900 is inside this range, we know that the current decision

variables that are positive will all remain positive, but the values will change. Each of the 50

units have a shadow price of $12, so Total Cost will go down by ($12)(50)=$600 to $15,000/Hour.

d. Duke is being pushed by stockholders to cut total payroll as much as possible by laying off

workers and not meeting all requirements for each level. They want to plan layoffs to affect as few

employees as possible. What level of employee should Duke target first? Second? Explain.

The Shadow prices for constraints 3, 4, and 5 (the lower bounds for the number of each type of

worker) indicates the value of one worker of each type. Since the shadow price for LM=$12 is the

greatest, for every LM laid off we save that much. Second, the shadow price for ST=$6 and we

would target them next. Since the CS constraint is non-binding, its shadow price is zero and

getting rid of some of them will not save you anything.

e. Xeus Trade School is soliciting Duke for a grant to train more skilled technicians. What can

Duke determine from the Solver printout regarding this proposal? Currently 500 STs are available.

Duke is only hiring 400 so there is slack and plenty of them they may want to give grants

elsewhere.

to schedule production for the next four months to meet expected demand. Abscam can produce

1,300 hammers per month on regular shift. Using overtime, it may produce up to 500 additional

hammers per month at a unit cost of $6 per hammer in excess of unit cost for regular production,

$12. It costs $3 per month to hold a hammer. Abscams demand is projected to be 1,000, 1,200,

1,700, and 2,000 units for the next four months. The unit penalty cost for unsold items at the end of

the fourth month is $5. Currently, 200 hammers are in the warehouse. Abscam management wishes

to determine the optimal production schedule to minimize the total costs of production and storage

but still meet the sales demand. The linear program formulation and Microsoft EXCEL Solver

solution for this setting follows. Let xj = The number of hammers to produce in regular shifts

for month j, j=1,2,3,4

yj = The number of hammers to produce in overtime shifts for month j

Ij = The number of hammers in inventory at the end of month j

Minimize C = 12x1+12x2+12x3+12x4+18y1+18y2+18y3+18y4+3I1+3I2+3I3+5I4

Subject To 200 + x1 + y1 1,000 = I1

I1 + x2 + y2 1,200 = I2

I2 + x3 +y3 1,700 = I3

I3 + x4 + y4 2,000 = I4

x1 1,300; x2 1,300; x3 1,300; x4 1,300

y1 500; y2 500; y3 500; y4 500

All xj, yj, and Ij 0

Microsoft Excel 12.0 Answer

Report

Worksheet: [Abscam Manufacturing.xlsx]Sheet1

Report Created: 05/06/2010

14:21:38 PM

Result: Solver found a solution. All constraints and optimality conditions

are satisfied.

Target Cell (Min)

Final

Cell Name Original Value Value

$B$19 Total Cost 0 75300

Adjustable Cells

Final

Cell Name Original Value Value

$B$11 x1 0 800

$C$11 x2 0 1300

$D$11 x3 0 1300

$E$11 x4 0 1300

$F$11 y1 0 0

$G$11 y2 0 0

$H$11 y3 0 500

$I$11 y4 0 500

$J$11 I1 0 0

$K$11 I2 0 100

$L$11 I3 0 200

$M$11 I4 0 0

Constraints

Slac

Cell Name Cell Value Formula Status k

Inventory Balance Month $B$14=$B

$B$14 1 800 $4 Binding 0

Inventory Balance Month $B$15=$B

$B$15 2 1200 $5 Binding 0

Inventory Balance Month $B$16=$B

$B$16 3 1700 $6 Binding 0

Inventory Balance Month $B$17=$B

$B$17 4 2000 $7 Binding 0

$B$11<=$ Not

$B$11 x1 800 D$6 Binding 500

$C$11<=$

$C$11 x2 1300 D$6 Binding 0

$D$11<=$

$D$11 x3 1300 D$6 Binding 0

$E$11<=$

$E$11 x4 1300 D$6 Binding 0

$F$11<=$ Not

$F$11 y1 0 E$6 Binding 500

$G$11<=$ Not

$G$11 y2 0 E$6 Binding 500

$H$11<=$

$H$11 y3 500 E$6 Binding 0

$I$11<=$E

$I$11 y4 500 $6 Binding 0

Report

Worksheet: [Abscam

Manufacturing.xlsx]Sheet1

Report Created: 05/06/2010

14:21:38 PM

Target Cell (Min)

Final

Cell Name Value

$B$19 Total Cost 75300

Adjustable Cells

Reduce Allowa Allowa

Final d Objective ble ble

Increa Decrea

Cell Name Value Cost Coefficient se se

$B$11 x1 800 0 12 3 0

$C$11 x2 1300 0 12 3 1E+30

$D$11 x3 1300 0 12 6 1E+30

$E$11 x4 1300 0 12 9 1E+30

$F$11 y1 0 6 18 1E+30 6

$G$11 y2 0 3 18 1E+30 3

$H$11 y3 500 0 18 0 1E+30

$I$11 y4 500 0 18 3 1E+30

$J$11 I1 0 0 3 3 0

$K$11 I2 100 0 3 1E+30 0

$L$11 I3 200 0 3 1E+30 3

$M$11 I4 0 26 5 1E+30 26

Constraints

Constr Allowa

Final Shadow aint ble Allowable

R.H. Increa

Cell Name Value Price Side se Decrease

$B$14 Inventory Balance Month 1 800 12 800 500 800

$B$15 Inventory Balance Month 2 1200 15 1200 500 0

$B$16 Inventory Balance Month 3 1700 18 1700 500 0

$B$17 Inventory Balance Month 4 2000 21 2000 500 0

a. Provide a production schedule for hammers.

Month 1 2 3 4

Regular Time Production 800 1,300 1,300 1,300

Overtime Production 0 0 500 500

b. What is the total cost for production only? Total Cost = 75,300

Cost of Inventory = (3)(0)+(3)(100)+(3)(200)+(5)(0) = 900

Total Production Cost = Total Cost Cost of Inventory = 75,300-900 = 74,400

Month1 I1 = 0; Month 2 I2=100; Month 3 I3=200; Month 4 I4=0

d. If the demand for month 4 changes to 2,200 what can you indicate about the optimal solution and

the total cost? The range of optimality for the Inventory Balance constraint for Month 4 is

2,000RHS42,500. Since 2,200 lies inside the range, the decision variables that are positive will

remain positive and the decision variables=0 will remain=0. Since the shadow price is 21, the

objective function will increase to 75,300+ (21)(200)=79,500.

e. Currently, there is no overtime being scheduled for month 1. What one change in this model

scenario would yield overtime in month 1 occurring? Explain. If the cost of overtime in month 1,

currently $18, was changed by the reduced cost or more to $12 or less, then overtime production

in month 1 would occur.

f. Regular production in month 1 is currently 800 units. What is the range of optimality for the

objective coefficient for x1? Explain the implications of this range. 12c115 As long as c1

remains in this range, x1 and all other decision variables will not change but the objective

function will change.

5. Fox Umbrellas, Surrey, England, Makers of the Worlds Finest Umbrellas, have been

keeping Englanders dry since 1868. The following linear programming model will indicate to

Fox the quantity of four different styles of umbrellas (women's, golf, men's, and folding

umbrellas) to stock in order to maximize profit. It is assumed that every one stocked will be sold.

The constraints measure storage space in units, special display racks, demand, and a marketing

restriction, respectively.

Maximize P = 4x1 + 6x2 + 5x3 + 3.5x4

Subject To 2x1 + 3x2 + 3x3 + x4 120

1.5x1 + 2x2 54

2x2 + x3 + x4 72

x2 + x3 12

x1, x2, x3, x4 0

Report

Worksheet: [Fox

Umbrellas.xlsx]Sheet1

Report Created: 05/12/2011

13:50:05 PM

Result: Solver found a solution. All constraints and optimality

conditions are satisfied.

Engine: Standard LP Simplex

Target Cell (Max)

Original Final

Cell Name Value Value

$B$20 Total Profit 3.4488E-286 318

Adjustable Cells

Original Final

Cell Name Value Value

$B$11 Decision Variables Women's 0 12

$C$11 Decision Variables Golf 1.276E-303 0

$D$11 Decision Variables Men 6.8976E-287 12

$E$11 Decision Variables Folding 1.2761E-303 60

Constraints

Slac

Cell Name Cell Value Formula Status k

$B$15<=$

$B$15 Storage Space 120 F$6 Binding 0

$B$16<=$ Not

$B$16 Display Racks 18 F$7 Binding 36

$B$17<=$

$B$17 Demand 72 F$8 Binding 0

$B$18>=$

$B$18 Marketing Restriction 12 G$9 Binding 0

Report

Worksheet: [Fox

Umbrellas.xlsx]Sheet1

Report Created: 05/12/2011

13:50:05 PM

Target Cell (Max)

Final

Cell Name Value

$B$20 Total Profit 318

Adjustable Cells

Reduc Objectiv Allowab Allowab

Final ed e le le

Coefficie Increas Decreas

Cell Name Value Cost nt e e

$B$11 Decision Variables Women's 12 0 4 1 2.5

$C$11 Decision Variables Golf 0 -0.5 6 0.5 1E+30

$D$11 Decision Variables Men 12 0 5 2.5 0.5

$E$11 Decision Variables Folding 60 0 3.5 1E+30 0.5

Constraints

Shado Constrai Allowab Allowab

Final w nt le le

R.H. Increas Decreas

Cell Name Value Price Side e e

$B$15 Storage Space 120 2 120 48 24

$B$16 Display Racks 18 0 54 1E+30 36

$B$17 Demand 72 1.5 72 24 48

$B$18 Marketing Restriction 12 -2.5 12 12 12

a. How many umbrellas of each type should be stocked? How much profit is expected?

x1*=12, x2*=0, x3*=12, x4*=60, P*=318

b. How much space is left unused? How many racks are used?

No space left unused. Only 18 of the 54 racks will be used.

c. By how much can the profit on women's umbrellas increase before the solution would

change? If the profit for womens umbrellas become 5, then the solution would change.

d. By how much can the amount of space increase before there is a change in the shadow or dual

price? If the amount of space becomes 168 then the shadow or dual price is no longer valid

and becomes zero.

e. You are offered an advertisement that should increase the demand constraint from 72 to 86 for

a total cost of $20. Would you say yes or no? Explain. Yes. First, the increase of 14 units is

within the range for that right-hand-side so the shadow or dual price is applicable for all 14

units. And, since the change in profit of 14*$1.5=$21 is greater than the cost of $20, the

proposition is profitable by $1.

f. Why is only one reduced cost non-zero? Explain the implications of this non-zero reduced

cost. The reduced cost is the change necessary for the objective function coefficient in order

for that variable to be positive in the final solution. Since only one decision variable is equal to

zero, it is the only one for which the reduced cost can be non-zero. The reduced cost of -0.5 is

an indication that profit for golf umbrellas must be 6.5 before the golf umbrella variable can

become positive.

6. Each week, the Jackson Purchase Press Co. publishes a magazine, a newspaper, an

advertisement mailer, and a prospectus and xj = the number of type j product to produce per week,

j=1, 2, 3, 4, respectively. The following linear programming model has an objective of maximizing

profit. The constraints are a resource constraint for ink availability, a resource constraint for paper

pulp availability, and two constraints from the Marketing Department: one for the minimum number

of magazines and prospectus since they are the most profitable, and one requiring that there be at

least as many total magazines and newspapers as there are total mailers and prospectuses.

Maximize Z = .5 x1 + .28 x2 + .3 x3 + .6 x4

Subject To 3 x1 + 2 x2 + 4 x3 + x4 50,000 Ink Availability

5 x1 + 6 x2 + 2 x3 + 7 x4 120,000 Paper Pulp Availability

x1 + x4 20,000 Magazine & Prospectus Min.

x1 + x2 x3 x4 0 Mag./News >= Mail./Prosp.

x1, x2, x3, x4 0

Worksheet: [Jackson Purchase

Press.xlsx]Sheet1

Report Created: 11/16/2008

19:32:25 PM

Result: Solver found a solution. All constraints and optimality

conditions are satisfied.

Engine: Standard LP Simplex

Solution Time: 00 Seconds

Iterations: 6

Subproblems: 0

Incumbent Solutions: 0

Original Final

Cell Name Value Value

$B$2

2 Total Profit Amount 0 11600

Adjustable Cells

Original Final

Cell Name Value Value

$B$1

3 Quantity Magazines 0 18400

$C$1

3 Quantity Newspapers 0 0

$D$1

3 Quantity Mailers 0 0

$E$1

3 Quantity Prospectuses 0 4000

Constraints

Cell Name Cell Value Formula Status Slack

$B$1 $B$17<=$

7 Ink Constraint 50000 F$6 Binding 0

$B$1 $B$18<=$

8 Paper Pulp Constraint 120000 F$7 Binding 0

$B$1 $B$19>=$ Not

9 Min. Mag./Prosp. Constraint 22400 F$8 Binding 2400

$B$2 Mag./News.>=Mail./Prosp. $B$20>=$ Not

0 Constraint 14400 F$9 Binding 14400

Worksheet: [Jackson Purchase Press.xlsx]Sheet1

Report Created: 11/16/2008 19:32:26 PM

Target Cell (Max)

Final

Cell Name Value

$B$2

2 Total Profit Amount 11600

Adjustable Cells

Reduc Objectiv

Final ed e Allowable Allowable

Coefficie

Cell Name Value Cost nt Increase Decrease

$B$1 0.0096153

3 Quantity Magazines 18400 0 0.5 1 85

$C$1

3 Quantity Newspapers 0 -0.28 0.28 0.28 1E+30

$D$1

3 Quantity Mailers 0 -0.02 0.3 0.02 1E+30

$E$1 0.0166666

3 Quantity Prospectuses 4000 0 0.6 67 0.4

Constraints

Shado Constrai

Final w nt Allowable Allowable

R.H.

Cell Name Value Price Side Increase Decrease

$B$1

7 Ink Constraint 50000 0.04 50000 10000 15000

$B$1 51428.571

8 Paper Pulp Constraint 120000 0.08 120000 43 20000

$B$1

9 Min. Mag./Prosp. Constraint 22400 0 20000 2400 1E+30

$B$2 Mag./News.>=Mail./Prosp.

0 Constraint 14400 0 0 14400 1E+30

a. Each product is packed in string with magazines & newspapers each having 24 in one string

pack and mailers & prospectuses each having 20 in a string pack. How many string packs of each

product should be produced? How much profit should Jackson expect each month?

18,400 Magazines/Week yields 766 string pack/Weeks (with 16 leftover magazines/Week).

4,000 Prospectus/Week yields 200 string packs/Week.

Newspapers and Mailers Zero string packs.

$11,600 Profit/Week yields $46,400 Profit/Month.

b. How much would the profit for mailers need to be to make mailers profitable for production?

Current profit of $0.30 would need to be increased by the Reduced Cost of $0.02 up to $0.32 or

greater before mailers would be profitable for production.

c. The Purchasing Department found 80,000 units of paper pulp 60,000 units may be obtained

from Westvaco at .06 per unit & another 20,000 units may be purchased for .09 per unit from Mead.

How many additional units should Jackson purchase? What would be the effect upon profit?

The Shadow Price for paper pulp is $0.08 so Jackson should purchase none from Mead since the

cost of those units is greater. The Westvaco units at $0.06 per unit should be purchased. Since the

allowable increase is 51,428.57143, they should only buy 51,428 units. The Total Profit for the

model will increase by ($0.08)(51,428) = $4,114.24. The Overall Total Profit will be $4,114.24

($0.06)(51,428) = $3,085.68 = $1,028.56.

d. Negotiations with Fidelity Investments for the prospectuses has resulted in increased revenues of

.18 per prospectus. With cost remaining constant, what would Jackson do to respond to this

enhancement of revenue? The new profit for a prospectus would be $0.78 and this outside of

the range of optimality for prospectuses. The model would have to be resolved to find the new

optimum and more prospectuses would be produced.

e. Ernst & Whinney, management consultants for Jackson, have indicated that the Marketing

Department constraints are key for this analysis. What should your detailed response to them be?

Those constraints are non-binding with plenty of surplus and thus are not key for the analysis.

7. Par, Inc. is a small manufacturer of golf equipment and supplies whose management has

decided to move into the market for medium- and high-priced golf bags. Pars distributor is enthusiastic

about the new product line and has agreed to buy all the golf bags Par produces over the next three

months. After a thorough investigation of the steps involved in manufacturing a golf bag, management

determined that each golf bag will require the following operations: 1) cutting and dyeing the material,

2) sewing, 3) finishing (inserting umbrella holder, club separators, etc.), and 4) inspection and

packaging. The linear program for the setting is to maximize profit where xj = the number of type j golf

bag to make in the three-month period, j=1 Standard, j=2 Deluxe.

Maximize P = 10x1 + 9x2

Subject To .7x1 + x2 630 Cutting and Dyeing

.5x1 + 5/6 x2 600 Sewing

x1 + 2/3 x2 708 Finishing

.1x1 + .25 x2 135 Inspection and Packaging

x1, x2 0

Microsoft Excel 12.0 Answer Report

Worksheet: [Par Inc.xlsx]Sheet1

Target Cell (Max)

Cell Name Original Value Final Value

$B$20 Total Profit Amount 0 7668

Adjustable Cells

Cell Name Original Value Final Value

$B$12 Optimal Quantity Standard 0 540

$C$12 Optimal Quantity Deluxe 0 252

Constraints

Cell Name Cell Value Formula Status Slack

$B$16 Cutting and Dyeing Amount 630 $B$16<=$D$5 Binding 0

$B$17 Sewing Amount 480 $B$17<=$D$6 Not Binding 120

$B$18 Finishing Amount 708 $B$18<=$D$7 Binding 0

$B$19 Inspection & Packaging Amount 117 $B$19<=$D$8 Not Binding 18

Microsoft Excel 12.0 Sensitivity Report

Target Cell (Max)

Cell Name Final Value

$B$20 Total Profit Amount 7668

Adjustable Cells

Final Reduced Objective Allowable Allowable

Cell Name Value Cost Coefficient Increase Decrease

$B$12 Optimal Quantity Standard 540 0 10 3.5 3.7

$C$12 Optimal Quantity Deluxe 252 0 9 5.285714286 2.333333333

Constraints

Final Shadow Constraint Allowable Allowable

Cell Name Value Price R.H. Side Increase Decrease

$B$16 Cutting and Dyeing Amount 630 4.375 630 52.36363636 134.4

$B$17 Sewing Amount 480 0 600 1E+30 120

$B$18 Finishing Amount 708 6.9375 708 192 128

$B$19 Inspection & Packaging Amount 117 0 135 1E+30 18

a. How many of each type of bag should Par produce in the three month period? What is the

contribution to total profit of each type of bag?

Standard Bags x1* = 540 Contribution to Profit (540)(10) = $5,400

Deluxe Bags x2* = 252 Contribution to Profit (252)(9) = $2,268

b. Par wants to investigate hiring three more workers for the finishing department. Each employee

can work up to 40 hours/week. These workers are coming from other departments and will retain

their current hourly wages+benefits of $5.98, $6.21, and $7.08, respectively, if hired. Should Par

hire any additional workers for the finishing department? If yes, which employees and for how

many hours? (Assume other departments with no slack will also be gaining additional resources.)

Shadow Price for the Finishing Department is $6.9375. The allowable increase for the three

month period is 192 hours. Since the workers work 40 hours/week, this is 160 hours/month and

480 hours/3-months. So, we would hire the cheapest worker ($5.98/hour) for 192 hours during

the 3-month period and not hire either of the other two workers.

c. The sewing department has come down with the H1N1 flu and it is feared that 200 hours of time

may be lost in sewing. What would happen to the solution and profit if this is correct?

There are currently 600 hours available for the sewing department. The allowable decrease is

120. Since 200 is beyond the allowable decrease and thus out of the range of 480RHS2, the

current optimal is no longer valid and the problem must be resolved.

d. There is a debate at Par regarding the potential profit for the deluxe model. Some accountants

think it may be undervalued and will actually bring a profit of $16 per bag while the marketing

department thinks that $13 per bag is a better estimate. What would happen to the optimal solution

and profit under each of these two scenarios?

The range of optimality for the deluxe model objective coefficient is 6.6666667c24.285714286.

If $16 per deluxe bag is correct, it is outside the range of optimality, the current solution is no

longer valid and a new solution must be found. If $13 per deluxe bag is correct, it is inside the

range and the current xj* still hold. The new P*=(540)(10) + (252)(13) = $8,676

e. How many hours will be utilized in the inspection and packaging department? What is the value

of getting more hours for this department? Explain. 117 hours will be utilized. Since there are

135 hours available in this department and not all of it is being used, the shadow price = $0 and

there is no value in getting more time for this department.

Short Answer Question Examples

8. A binding constraint for a continuous linear programming model with a unique solution

a. is one that EXCEL Solver found to be difficult to determine.

b. will have a slack or surplus value that is positive.

c. should be determined prior to running the model and all of them deleted.

d. are the only constraints that will result in negative slacks or surpluses.

e. None of the above is correct.

a. will have a positive shadow or dual price.

b. will have a negative shadow or dual price.

c. will have a shadow or dual price of zero.

d. has no restrictions for its shadow or dual price.

e. should be removed from the model.

f. None of the above is correct.

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