BUS 220 Study Guide - Midterm Guide: Brazil Nut, Microsoft Excel, Sensitivity Analysis

• School: Stony Brook University
• Department: Business Management
• Course: BUS 220
• Professor: Jadranka Skorin- Kapov

Document Summary

Kanchua nut example (blending problem): formulation and sensitivity analysis. Objective function calculation (profit =revenue cost): z = (0. 5 - 0. 1)* 16/13*(xp + xc + xh + xb) (0. 25xp +0. 4xc + 0. 8xh + 0. 6xb) = Max z = 0. 2423xp +0. 0923xc 0. 3077xh 0. 1077xb s. t. = 0. 2423xp +0. 0923xc 0. 3077xh 0. 1077xb xh <= 1,000 xb <= 1,000. 0. 67xh + 0. 33xb <= 0 xb, xc, xh, xb >= 0: enter data into excel and solve the problem using the solver option. mix comp. 2 lhs: answer the following sensitivity questions. How much the profit coefficient of cashews needs to be increased in order for kanchua to purchase some cashews and include them in the mix? (profit increase=cost reduction) So, the price per pound od cashews has to be reduced from 0. 4 to 0. 25. This is also (0. 15) the allowable increase in cashews profit coefficient. Peanuts profit per pound in going down because peanut prices are going up.