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Question 1
Answer to 1 A Click to view answer!
Answer to 1 B Click to view answer!
Answer to 1 C. Click to view answer!
Answer to 1 D. Click to view answer!
Question 3
Answer to 3A Click to view answer
Answer to 3A Click to view answer
Monthly
Production Rate
Model 101 Model 102
1000 1500
Notes: a. Based on a monthly production rate of 1,000 Model 101 trucks and 1,500 Model 102 trucks
b. Fixed overhead was distributed to the two truck models in proportion to degree of capacity utilization
Variable Overhead/Unit
Mode 102
$ 4,000.0
$ 2,000.0
$ 2,500.0
$ 8,500.0
Model 101 Model 102
Selling Price $ 39,000.00 $ 38,000.00 Objective function
Variable Cells
Direct Material $ 24,000.00 $ 20,000.00
Direct Labor $ 4,000.00 $ 4,500.00
Variable Overhead $ 8,000.00 $ 8,500.00
Total $ 36,000.00 $ 33,000.00
Profit Contribution $ 3,000.00 $ 5,000.00
My answers
1. B. Extra unit of capacity is worth $2000
Product mix at this level of engine assembly capacity gives us 1999 units of Model 101 and 1001 un
6.1
Changed cell
Model 101 Model 102
Selling Price $ 39,000.00 $ 38,000.00
My answers
1. C Extra unit of capacity is worth $2000
Product mix at this level of engine assembly capacity gives us 1999 units of Model 1
6.1
Changed cell
Microsoft Excel 16.0 Answer Report
Worksheet: [Merton_Brajesh_PGPEX_16.xlsx]Question 1a
Report Created: 6/11/2017 4:05:41 PM
Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
Solver Engine
Engine: Simplex LP
Solution Time: 0.016 Seconds.
Iterations: 3 Subproblems: 0
Solver Options
Max Time Unlimited, Iterations Unlimited, Precision 0.000001, Use Automatic Scaling
Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative
Variable Cells
Cell Name Original Value Final Value Integer
$G$4Count of trucks Model 101 0 2000 Contin
$H$4Count of trucks Model 102 0 1000 Contin
Constraints
Cell Name Cell Value Formula Status Slack
$I$6 Engine Assembly Value LHS 4000 $I$6<=$K$6 Binding 0
$I$7 Metal Stamping Value LHS 6000 $I$7<=$K$7 Binding 0
$I$8 Model 101 Assembly Value LHS 4000 $I$8<=$K$8 Not Binding 1000
$I$9 Model 102 Assembly Value LHS 3000 $I$9<=$K$9 Not Binding 1500
Microsoft Excel 16.0 Sensitivity Report
Worksheet: [Merton_Brajesh_PGPEX_16.xlsx]Question 1a
Report Created: 6/11/2017 4:05:41 PM
Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$G$4 Count of trucks Model 101 2000 0 3000 2000 500
$H$4 Count of trucks Model 102 1000 0 5000 1000 2000
Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$I$6 Engine Assembly Value LHS 4000 2000 4000 500 500
$I$7 Metal Stamping Value LHS 6000 500 6000 500 1000
$I$8 Model 101 Assembly Value LHS 4000 0 5000 1E+030 1000
$I$9 Model 102 Assembly Value LHS 3000 0 4500 1E+030 1500
0
Answer to 1d
Maximum allowable increase in engine assembly 500
So change in value of one additional unit of capacity will happen after increase of 500 units of engine assembly valu
Answer to 2
Total rent $ 1,000,000.00
Merton should go by the maximum allowable increase as per the sensitivity analysis output i.e. 500 machine hours
Use shadow price to calculate rent
00 units of engine assembly value
Model 103
Total engine capacity sufficient for 5000 trucks
Total metal stamping capacity would be sufficient to produce 4000 trucks
Each Model 103 requires only half as much time as Model 101 truck
Contribution
0.8 0.8
ent to produce 4000 trucks 1.5 1.5
e as Model 101 truck 1 1
$ 2,000.00
Microsoft Excel 16.0 Answer Report
Worksheet: [Merton_Brajesh_PGPEX_16.xlsx]Question 3
Report Created: 6/11/2017 5:24:20 PM
Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
Solver Engine
Engine: Simplex LP
Solution Time: 0.016 Seconds.
Iterations: 3 Subproblems: 0
Solver Options
Max Time Unlimited, Iterations Unlimited, Precision 0.000001, Use Automatic Scaling
Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative
Variable Cells
Cell Name Original Value Final Value Integer
$G$4 Count of trucks Model 101 0 2000 Contin
$H$4 Count of trucks Model 102 0 1000 Contin
$I$4 Count of trucks Model 103 0 0 Contin
Constraints
Cell Name Cell Value Formula Status Slack
$J$6 Engine Assembly Value LHS 4000 $J$6<=$L$6 Binding 0
$J$7 Metal Stamping Value LHS 6000 $J$7<=$L$7 Binding 0
$J$8 Model 101/103 Assembly Value LHS 4000 $J$8<=$L$8 Not Binding 1000
$J$9 Model 102 Assembly Value LHS 3000 $J$9<=$L$9 Not Binding 1500
Microsoft Excel 16.0 Sensitivity Report
Worksheet: [Merton_Brajesh_PGPEX_16.xlsx]Question 3
Report Created: 6/11/2017 5:24:20 PM
Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$G$4 Count of trucks Model 101 2000 0 3000 2000 500
$H$4 Count of trucks Model 102 1000 0 5000 1000 2000
$I$4 Count of trucks Model 103 0 -350 2000 350 1E+030
Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$J$6 Engine Assembly Value LHS 4000 2000 4000 500 500
$J$7 Metal Stamping Value LHS 6000 500 6000 500 1000
$J$8 Model 101/103 Assembly Value LHS 4000 0 5000 1E+030 1000
$J$9 Model 102 Assembly Value LHS 3000 0 4500 1E+030 1500
Question 3b Contribution of Model 103 needs to increase by 350 for it to become feasible
Final contribution should be more than 2350
0 for it to become feasible
Objective function Profit Contribution
Variable Cells Count of trucks
Constraints
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Change
Decision
Model 101 Model 102 Total Profit contribution
$ 3,000.00 $ 5,000.00 $ 12,000,000.00
1500 1500
Constraints Value LHS Condition Value RHS
1 2 4500 <= 6000 6000 additional capacity
2 2 6000 <= 6000
2 3000 <= 5000
3 4500 <= 4500
$ 8,600,000.00
$ 750,000.00
$ 9,350,000.00
500
$ 3,600.00
$ 900,000.00
$ 10,250,000.00
$ 1,750,000.00
$ 2,400,000.00
$ (650,000.00)
Do not deploy overtime
additional capacity
Objective function Profit Contribution
Variable Cells Count of trucks
Constraints
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Model 101/102 ratio
Answer 5
Model 101- Quantity
Model 102- Quantity
At this product mix the profit contribution is less than from 1a
Model 101 Model 102 Total Profit contribution
$ 3,000.00 $ 5,000.00 $ 10,500,000.00
2250 750
Constraints Value LHS Condition Value RHS
1 2 3750 <= 6000
2 2 6000 <= 6000
2 4500 <= 5000
3 2250 <= 4500
1 -3 0 >= 0
2250
750
bution is less than from 1a