SOLVED

8) What is the usefulness of a shadow price (or dual value)? 9) What is sensitivity analysis? 10) A manager must decide on the mix of products to produce for the coming week. Product A requires three minutes per unit for molding, two minutes per unit for painting, and one minute for packing. Product B requires two minutes per unit for molding, four minutes for painting, and three minutes per unit for packing. There will be 600 minutes available for molding, 600 minutes for painting, and 420 minutes for packing. Both products have contributions of $1.50 per unit. Answer the following questions; base your work on the solution panel provided. A B RHS Dual Maximize 1.5 1.5 Molding 3. 2. ⇐ 600. 0.375 Painting 2. 4. ⇐ 600. 0.1875 Packing 1. 3. ⇐ 420. 0. Solution —> 150. 75. 337.5 a.What combination of A and B will maximize contribution? b.What is the maximum possible contribution? c.Are any resources not fully used up? Explain. 11) A craftsman builds two kinds of birdhouses, one for wrens (X1), and one for bluebirds (X2). Each wren birdhouse takes four hours of labor and four units of lumber. Each bluebird house requires two hours of labor and twelve units of lumber. The craftsman has available 60 hours of labor and 120 units of lumber. Wren houses profit $6 each and bluebird houses profit $15 each. Use the software output that follows to interpret the problem solution. Include a statement of the solution quantities (how many of which product), a statement of the maximum profit achieved by your product mix, and a statement of “resources unused” and “shadow prices.” 12) Suppose that a constraint for assembly time has a shadow price of $50/hour for 15 hours in either direction and that all available assembly time is currently used (would require overtime to do more). If the salary of workers is $30 and they receive 50% extra pay for overtime what should management do?