Question

Use the information in Problem #7 in Chapter 12 (Vollmer Manufacturing) to answer the following questions. #1.1 The profit maximizing values of the variables are Component 1 :- and Component 3- nent 2- #1.2 Now suppose we can purchase a new Shaper machine such that the time utilization rates are reduced from 6, 4,4 to 5, 3,4. How much would you be willing to pay for the new Shaper machine? Use the information in Problem #11 in Chapter 15 to answer the following questions. #2.1 The values computed for the numbered nodes are as follows Node 1: Node 5 Node 9 #2.2 The solution to Problem #11 is MAKE A BID / DO NOT MAKE A BID and HIRE THE MARKET RESEARCH/DO NOT HIRE THE MARKET RESEARCH and BUILD THE PROJECT/DO NOT BUILD THE PROJECT Node 2 Node 6 Node 10: Node 4 Node 8 Node 3 Node 7: ff table Consider the followin VALUE State 1 State 2 State 3 State 4 Act 1 Act 2 Act 3 Act 4 70 70 20 30 .10 20 30 50 0.2 30 50 30 20 0.2 20 10 20 100 0.3 Probabilities0.3 #3.1 The simple pessimist will choose ACT because #3.2 The risk neutral decision maker will choose ACT because

Answer 1

Solve the formulated problem using excel solver and following the steps as shown below: 1. Open excel and enter data as shown in table 2. Open solver by Excel>Data tab> Solver 3. Enter constraints and objective function in the solver dialog box 4. Chooses simplex option 5. Click on solve Decision variables Objective Function 600 700 200 -SUMPRODUCT B4:D4,B5:DS 仁7200 7 Constraint-1 6 8 Constraint-2 4 9 Constraint-3 10 Constraint-4 1 11 Constraint-5 12 Constraint-6 1 13 SUMPRODUCT(SB$4:SD$4,B7:D7 :SUMPRODUCT(SBS4:SDS4,B8:D8) |仁16600 SUMPRODUCT(SBS4:SOS4,B9:D9) 丨仁1200 =SUMPRODUCT(SBS4:SDS4,B10:D10) |<=11000 :SUMPRODUCT(SBS4:SOS4,B11:D11) |<:11000 SUMPRODUCT(SB$4:SD$4,B12:D12)600 Table-1: Showing input excel sheet

Solver Parameters Set Target Cell E Equal To Max Mn Yalue of: 0 Ey Changing Cells: Guess Subject to the Constraints: SE$12 $G$12 ES7:SES11 SG$7:$G$11 Reset All Figure-1: Showing solver dialog box Decision variables Objective Function 600 700 200 6 Constraint-1 Constraint-2 Constraint-3 Constraint-4 Constraint-5 Constraint-6 6 7200 6300 200 600 700 600 7200 200 1000 1000 600

Adjustable Cells Flnal Reduced Objectve Allowable Allowable Value Cost Coefflclent Increase Decrease Cell SBS4 X1 SC$4 X2 SD$4 X3 Name 600 700 200 1E+30 3 0.666666667 1E+30 Constraints Final Shadow Constraint Allowable Allowable Value Price R.H. Cell SES7 Constraint-1 Objective Function SE$8 Constraint-2 Objective Function SE$9 Constraint-3 Objective Function SE$10 Constraint-4 Objective Function SE$11 Constraint-5 Objective Function SES12 Constraint-6 Objective Function Name SIde Increase Decrease 7200 6300 200 600 700 7200 6600 200 1000 240 1E+30 700 1E+30 1E+30 2800 400 85.71428571 There will be no impact on optimal solution because the allowable decrease for Xl is greater than 4. Yes they make sense but up to zero. The shadow price of constraint 6 is -1. This means a decrease of 2 units will increase the optimal value by 2 units.|