Answer 4-a and 4-b Problem 4: Westwood Corporation Excel 16.0 Sensitivity Report
ID: 349142 • Letter: A
Question
Answer 4-a and 4-b
Problem 4: Westwood Corporation Excel 16.0 Sensitivity Report Worksheet: [EXAM 1 excel.xlsx]WestWood Report Created: 6/27/2017 10:15:21 ANM Engine: Standard LP/Quadratic 4-a. What would happen if the cost of producing Manual Utility carts increased by $20? Cell Cel Final Value 3 SES10 Total Cost 52000 0 Decision Variable Cells 4-b. How much should the company be willing to Final Reduced Objeci Allowable Allowable Value Cost Coefficient Increase 2 Cell 3 SB$5 Produce Motorized 4 SCS5 Produce Manual S SBS6 Buy Motorized 6 SC$6 Name pay to acquire additional assembly capacity to loosen that specific bottleneck, up to how many allowable hours? 150 67 200 15.0000001 100 15.00000015 11.25000008 235 115 11.25000008 15.00000015 1E+30 15 E+30 15 133 8 Constraints Final Shadow Constraint Allowable Allowable Value 0 Cell 1 SBS12 Total Available Base Case 2 SC$12 Total Available Manual 3 SD$16 Assembly Used 4 SD$17 Inspection Used 5 SDS18 Packaging Used Name Price R.H. Side Incre ase Decrease 150 50 115 10 1E+30 133.3333333 162.5 1E+30 116.6666667 1E+30 54.16666667 100 183 146Explanation / Answer
4-a. Allowable increase for Produce manual is 15. Therefore, increase by 20 is outside allowable range. Hence the optimal solution will change .
4-b. Shadow price of assembly used is -10, which means each additional unit of capacity is worth -10 (it will reduce total cost by 10). Therefore , the maximum that the company should be willing to pay to acquire additional assembly capacity is 10. Allowable increase is 162.5 . Therefore a maximum of 162.5 additional hours should be acquired.