Management: What Are The Optimal Solution And The Total Profit? (Essay Sample)

Name of student:
School:
Name of professor:
Management:
Model 1 model2
Number to make 1000 800 total profits
Unit’s profits $200 $280 $424,000
Constraints used available
Steel available 20 25 40000 40000
Manufacturing minutes 40 100 120000 120000
Assembly minutes 60 40 92000 96000
Question one.
What are the optimal solution and the total profit?
Answer.
The optimum solution is production of 1000 model1 and 800 model two. Which in turn give out a total profit of $424,000.
Question two.
If the unit profit of the Model 2 decreases to $250 per unit, how would the optimal solution change?
Answer.
$250 per unit falls within the range of the optimality. Hence since any fall of $250 or greater but less than $500 usually causes no change in the optimal solution.
Question three.
How much should the company be willing to pay to acquire additional capacity in the 'Assembly minutes' area? Explain in detail.
Answer.
Since the company did not use all the assembly minutes which were available then the constrains is non-binding. The marginal benefit...