Sensitivity Analysis Question: A company manufactures four vari ✓ Solved

Sensitivity Analysis Question: A company manufactures four variants of the same product (Product X), and in the final part of the manufacturing process there are Assembly, Polishing and Packing operations. For each variant the time required for these operations is shown below (in minutes per unit) as is the profit per unit sold.

Variant Assembly Polishing Packing Profit (£) X.50 X.50 X.00 X.50 Given the current state of the labour force, the company estimates that each year, they have 100,000 minutes of Assembly time, 50,800 minutes of Polishing time and 60,000 minutes of Packing time available. A solution to the linear programme is given below, where S1, S2 and S3 are slack variables for the labour time for the Assembly, Polishing and Packing operations, respectively. Final Tableau X1 X2 X3 X4 S1 S2 S3 Solution S....,840 X....,480 X....,680 Z 1....,640 Required 1. Provide an explanation of the meanings of each of the terms in the final Tableau above. 2. What if 200 units of the product X1 and 500 units of the product X4 should be produced to satisfy an influential customer? What will be the new production plan and the total contribution generated per year? Also, state the impact of this on the resources remaining. Total = 12 marks

Paper For Above Instructions

Sensitivity analysis is a critical tool in operations management, especially within manufacturing settings where different product variants compete for limited resources. This paper aims to explain the terms in the given final tableau and to analyze the production plan alterations needed to accommodate new customer demands while assessing the impact on resource allocation.

Understanding the Final Tableau

In linear programming, a tableau is utilized to display the results of a linear programming problem. It expresses not only the decision variables but also the constraints and their corresponding slack variables, which measure the unused resources in each operational capacity. In the provided final tableau, the following terms are significant:

  • X1, X2, X3, X4: These represent the variables corresponding to the production quantities of each product variant produced. Each 'Xi' refers to a specific variant of Product X.

  • S1, S2, S3: These are slack variables for Assembly, Polishing, and Packing operations, respectively. They indicate the available time remaining after accounting for the time spent on production.

  • Z: This denotes the objective function value representing the total profit. In the tableau, this is summed to give the total contribution of all produced units.

Current Labor Time Allocations

The company has predefined limits for operational time per year in three crucial areas: Assembly (100,000 minutes), Polishing (50,800 minutes), and Packing (60,000 minutes). These constraints need to be balanced against the production requirements to maximize profitability.

New Production Requirements

In this scenario, there is a new requirement to produce a minimum of 200 units of Product X1 and 500 units of Product X4. To find the new production plan, we first need to compute the total time consumed by the required production:

Time Calculation:

Assuming:

  • Assembly time per unit of X1 = 0.50 minutes

  • Assembly time per unit of X4 = 0.50 minutes

  • Polishing time per unit of X1 = 0.50 minutes

  • Polishing time per unit of X4 = 0.50 minutes

  • Packing time per unit of X1 = 0.00 minutes

  • Packing time per unit of X4 = 0.50 minutes

Calculating the total time required for the new production plan:

  • Assembly: (200 units of X1 0.50 min) + (500 units of X4 0.50 min) = 100 + 250 = 350 minutes

  • Polishing: (200 0.50) + (500 0.50) = 100 + 250 = 350 minutes

  • Packing: (200 0.00) + (500 0.50) = 0 + 250 = 250 minutes

Resource Impacts

Next, we consider the total resources consumed against the available time:

  • Remaining Assembly Time: 100,000 - 350 = 99,650 minutes

  • Remaining Polishing Time: 50,800 - 350 = 50,450 minutes

  • Remaining Packing Time: 60,000 - 250 = 59,750 minutes

Total Contribution Calculation

Finally, we compute the total profit contribution from producing both products:

  • Profit from X1: 200 units * £0.50/unit = £100

  • Profit from X4: 500 units * £0.50/unit = £250

Total Profit Contribution: £100 + £250 = £350

Conclusion

The final tableau provides critical insights into the manufacturing process, revealing how time constraints interact with product demand. With the updated customer orders accounted for, the new production plan indicates a modest consumption of resources while leaving ample time for additional production within the constraints. This analysis exemplifies how understanding sensitivity in operations can guide effective decision-making in a competitive manufacturing environment.

References

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