BUS 220 Study Guide - Midterm Guide: 32X, Shadow Price, Sensitivity Analysis
27 Mar 2016
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Min z = 32x1+32x2+32x3+35y1+35y2+35y3+2w1+2w2 s. t. x1 xi, i=1,2,3; yi, i=1,2,3; wi, i=1, 2 are nonnegative. +y2 x2 x2 x1: enter data into excel and solve the problem using the solver option. Save the answer and sensitivity reports: answer the following sensitivity questions. Q1: suppose the option of having overtime labor is not available any more. A1: since the overtime production option was not used (i. e. y1=y2=y3=0), deleting that option would not change the production schedule. A2: the original demand for the 1st month is 550, which is the right hand side (rhs) of the 7th constraint. Since the increase of 5 is allowable, the shadow price for that constraint (i. e. 32) is valid. A3: since the allowable increase for the rhs of the 2nd constraint is 120, increase of 1 is allowable. That means that increase of 1 implies the change (-2)*1= -2 to the value of z. Hence the new value of z will be 49,840-
