CHAP04 Sensitivity

Chapter 4 - Sensitivity Analysis & The Simplex Method : S-1
Chapter 4
Sensitivity Analysis & The Simplex Method
Excel Solutions
1. Howie's numbers are correct. Factory overhead is not a variable cost -- it is a sunk cost that must be paid
reardless o! which type o! hot tub is produced.
". #y contradiction$ suppose that a variable assumes an optimal value that is somewhere between its upper
and lower limits and that the reduced cost !or this variable is not %ero. &his implies that i! this variable is
increased or decreased by one unit$ the absolute value o! the chane in the ob'ective !unction will be
e(uivalent to the absolute value o! the reduced cost. )ncreasin the value o! this variable by one unit will
either increase or decrease the value o! the ob'ective !unction while decreasin the value o! the variable
will have the opposite e!!ect. &hus$ by increasin or decreasin the value o! this variable the ob'ective
!unction can be improved. &here!ore$ the solution could not have been optimal.
*. See !ile+ ,rb-.*.xlsm
Microsoft Excel Sensitivity Report (Obtained Using Standard LP/Quadratic Engine
Adjustable Cells
!inal Reduced Ob"ective #llo$able #llo$able
%ell &a'e (alue %ost %oefficient )ncrease *ecrease
$C$4 Value: X1 5 0 4 1E+30 2.8
$D$4 Value: X2 0 -4.666666667 2 4.666666667 1E+30
Cost!a"ts
!inal S+ado$ %onstraint #llo$able #llo$able
%ell &a'e (alue Price R,-, Side )ncrease *ecrease
$E$8 #sed: 10 0 20 1E+30 10
$E$$ #sed: 15 1.333333333 15 15 15
a. &he ob'ective !unction coe!!icient !or /
1
can decrease by ".0 1to 1."2 or increase by any amount
without chanin the optimal solution.
b. &he optimal solution is uni(ue. 3one o! the allowable increase or decrease values !or the ob'ective
coe!!icients are %ero.
c. )t has to increase by at least -.444445
d. )! /
"
were !orced to e(ual 1$ the optimal ob'ective !unction value would be approximately "6 - -.45 7
18.**.
e. 9n increase o! 16 in the :HS value o! the second constraint is within the allowable rane o! increase
!or the shadow price o! this constraint. &here!ore$ i! the :HS !or the second constraint increases !rom
18 to "8 the new ob'ective !unction value would be approximately "6 ; 1.** <167**.**.
!. &he new reduced cost !or /
"
would be " - 1- < 6 ; 1 < 1.***2 7 6.45. &here!ore$ it would be
pro!itable to increase the value o! /
"
and the current solution would no loner be optimal = but we
can>t say what the new solution would be without re-solvin the problem.
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-"
-. See !ile+ ,rb-.-.xlsm

Adjustable Cells
$C$4 Value: X1 12 0 2 1E+30 0
$D$4 Value: X2 0 0 4 0 1E+30
Cost!a"ts
$E$10 #sed: 12 0 2 10 1E+30
$E$8 #sed: -12 0 8 1E+30 20
$E$$ #sed: 12 2 12 1E+30 10
a. ?onstraint " is bindin. 13ote that this constraint is re!lected by the third row in the ?onstraints
section o! the report.2
b. &here is an alternate optimal solution. @ariable /
"
is at its lower bound 1o! %ero2 but also has a
reduced cost o! %ero. &his indicates that the value o! /
"
could be increased while havin %ero impact
on the optimal ob'ective !unction value.
c. &here is no way to answer this (uestion directly !rom the sensitivity report. Ae know that the optimal
solution would chane since the allowable decrease in the ob'ective !unction value o! /
1
is %ero$ but
we cannot tell what the new optimal solution would be. )! we re-solve the revised model the solution
is /
1
7"$ /
"
78.
d. )t can decrease by any amount without chanin the solution.
e. ?onstraint " is the only bindin constraint. &here!ore$ we would want to increase its :HS value
be!ore any other.
8. See !ile+ ,rb-.8.xlsm
Adjustable Cells
$C$4 Value: X1 0 3 5 1E+30 3
$D$4 Value: X2 0 1 3 1E+30 1
$E$4 Value: X3 1 0 4 2 4
Cost!a"ts
$%$8 &!odu'ed: 2 2 2 1E+30 1
$%$$ &!odu'ed: 2 0 1 1 1E+30
a. &he allowable decrease is -$ so the smallest value o! the ob'ective !or /* without chanin the
solution is 6.
b. &he new ob'ective would be unbounded.
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-*
c. )ncreasin the :HS o! the !irst constraint reduces the !easible reion. &here!ore$ the ob'ective
!unction would be increased 1made worse2 at a rate o! " per unit increase in the :HS value. &hus$ the
new ob'ective !unction value would be - ; " < 8 7 1-.
d. - - "<1 7 "
e. Bes$ 1C* ; 1C- 7 5C1" D 166E
4. a. F)3+ "46/1* ; ""6/1- ; "G6/18 ; "*6/"* ; "-6/"- ; *16/"8
S.&.+
/1* ; /1- ; /18 "6
/"* ; /"- ; /"8 "6
/1* ; /"* 16
/1- ; /"- 18
/18 ; /"8 16
/i' 6
b. See !ile+ ,rb-.4.xlsm
c. See below 1&otal cost 7 H0$4662
Adjustable Cells
$C$10 Eust"s ("a)" 0 50 260 1E+30 50
$D$10 Eust"s *!lado 10 0 220 20 0
$E$10 Eust"s +alla,assee 10 0 2$0 0 310
$C$11 Cle!)ot ("a)" 10 0 230 50 230
$D$11 Cle!)ot *!lado 5 0 240 0 20
$E$11 Cle!)ot +alla,assee 0 0 310 1E+30 0
Cost!a"ts
$C$12 -,"..ed ("a)" 10 230 10 5 10
$D$12 -,"..ed *!lado 15 240 15 5 5
$E$12 -,"..ed +alla,assee 10 310 10 5 5
$%$10 Eust"s #sed 20 -20 20 5 5
$%$11 Cle!)ot #sed 15 0 20 1E+30 5
d. 3o.
e. 3o$ alternate optima exist.
%apacity
Mia'i Orlando .alla+assee Used #vailable
Eustis / 01 1 2/ 2/
%ler'ont 0/ / 1 01 2/
S+ipped 0/ 01 0/
*e'and 0/ 01 0/
.otal %ost 3456//
!. &he solution would not chane. &he current solution uses only 18 o! the "6 tons o! capacity available
at ?lermont.
Chapter 4 - Sensitivity Analysis & The Simplex Method : S--
. :educin the capacity in Eustis would increase costs by H"6 per unit yieldin an ob'ective !unction
value o! H0$466;"6<8 7 H0$566
h. Every additional ton o! concentrate shipped !rom Eustis to Fiami would increase costs by H86.
&otal ,ro!it H*"$866
Adjustable Cells
$C$4 /ee!ato!s 130 0 250 1E+30 150
$D$4 Alte!ato!s 0 -225 150 225 1E+30
Cost!a"ts
$E$8 0"!"1: 260 125 260 20 260
$E$$ +est"1: 130 0 140 1E+30 10
a. &here is 6 excess wirin capacity and 16 excess units o! testin.
b. H*"$866 ; H1"8<16 7 H**$586
c. H""8
d. Isin the 166E rule+ 86C186 ; 58C""8 7 "C* D 166E. &he solution would not chane.
e. Jet / 7 the increase in the price o! alternators. Ae can be sure the optimal solution will not chane
as lon as "8C186 ; /C""8 D 1 or / D ""811"8C1862 7 105.8. So the maximum pro!it on alternators
would be H186;H105.8 7 H**5.8.
!. &he new reduced cost on alternators would be 186 - 1"8<1.8 - 6<" 7 -*5.8. &hus$ it would still be
unpro!itable to produce alternators and the solution would not chane.
Adjustable Cells
!inal
Reduce
d Ob"ective #llo$able #llo$able
$C$5 2a3o!s 240 0 70 10 40
$D$5 4oo)e!s 420 0 40 53.33 5
Cost!a"ts
$E$$ &ol5)e! #sed $00 32 $00 200 300
$E$10 &!odu't"o +")e #sed 2400 2 2400 200 800
$E$11 +otal &!odu't"o #sed 660 0 700 1E+30 40
$E$12 &!odu't ("6 #sed -180 0 300 1E+30 480
a. 3o$ it could decrease by H-6 without chanin the solution.
b. )t could. 9t a pro!it o! H*8 there could be alternate optimal solutions.
c. Each additional unit o! polymer 1up to "66 more2 would increase pro!it by H*" per unit$ each unit
decrease o! polymer 1up to *66 less2 would decrease pro!it by H*" per unit.
d. &his is a non-bindin constraint. 9t the optimal solution$ this constraint is -6 units below its :HS
value 15662 so chanin the constraint :HS value 1within its allowable limits2 would not chane the
solution or allow !or additional pro!it.
e. &he allowable increase on the shadow price !or labor is "66 units. So we can>t say what pro!it would
result !rom a *66 unit increase in labor without re-solvin the problem.
G. See !ile+ ,rb-.G.xlsm
&otal ,ro!it 7 H"4$5-6
Adjustable Cells
$7$1$ A'!es to &lat 0ate!)elos 60 0 256 28.5 66.33333333
$C$1$ A'!es to &lat Catalou.es 40 0 284.5 $$.5 28.5
Cost!a"ts
$%$11 0ate! #sed .e! ,ou!8 69000 1 6000 1500 1000
$%$1$ A'!es &lated .e! ,ou!8 100 1$$ 100 20 20
a. &he pro!it per acre !or watermelons can drop by H44.** 1to H10G.45 per acre2. &hat would occur i!
the price o! watermelons dropped to about H"."4 per unit.
b. &he pro!it per acre o! cantaloupes would have to increase by HGG.86 1H*0- per acre2. &hat would
occur i! the price o! cantaloupes dropped to about H1.** per unit.
c. 46C44.** ; 86CGG.8 7 1.-65 K 166E. &here!ore we cannot uarantee that the solution is still optimal.
d. &he !armer should lease all "6 acres and be willin to pay up to H1GG per acre 1assumin he can use
his own water on the additional "6 acres or otherwise water it as needed !or !ree2.
&otal ,ro!it 7 H"4$666
Adjustable Cells
%ell &a'e (alue %ost
%oefficien
t )ncrease *ecrease
$C$5 :t5 Doo!s 20 0 500 300 233.3333
$D$5 :t5 0"do;s 40 0 400 350 150
Cost!a"ts
$E$$ Cutt"1 #sed 40 350 40 40 13.33333
$E$10 -ad"1 #sed 40 300 40 6.666667 20

$E$11 %""s,"1 #sed 50 0 60 1E+30 10
a. 3o$ the ob'ective coe!!icient on doors could increase by H*66 1to H0662 without chanin the optimal
solution.
b. Bes$ the ob'ective coe!!icient on windows can only decrease by H186 1to H"862 without chanin the
optimal solution.
c. &he shadow price 1marinal value2 is H6 because there is a surplus o! this resource.
d. H*86L"67H5666.
e. &he shadow price on sandin is H*66 C unit 1within the allowable increaseCdecrease2. &he allowable
decrease is "6 units. So i! another company was willin to pay H-66 !or 18 hours o! capacity$
Sanderson would come out ahead by H1$866 1i.e.$ 1-66-*662L182. )t would be pro!itable to Sanderson
to o!!er up to "6 hours o! their sandin capacity !or this purpose. )! the other company wanted "8
hours o! capacity$ the J, model would need to be modi!ied to see i! this would be pro!itable. 19nd
that analysis shows it would not be economicallybene!icial to do so as total pro!it would drop !rom
H"4$666 to H"8$666.2
&otal cost 7 H-8*$*66
Adjustable Cells
$7$6 - (a<e (odel 1 39000 0.00 50 4 57
$C$6 - (a<e (odel 2 550 0.00 83 14 8
$D$6 - (a<e (odel 3 $00 0.00 130 8 137
$7$7 - 7u5 (odel 1 0 4.00 61 1E+30 4
$C$7 - 7u5 (odel 2 19450 0.00 $7 8 14
$D$7 - 7u5 (odel 3 0 8.00 145 1E+30 8
Cost!a"ts
$7$13 = A>a"lable (odel 1 39000 57.00 3000 380 2$00
$C$13 = A>a"lable (odel 2 29000 $7.00 2000 1E+30 1450
$D$13 = A>a"lable (odel 3 $00 137.00 $00 211.1111 $00
$E$17 - 0"!"1 #sed $9525 0.00 10000 1E+30 475
$E$18 - ?a!ess"1 #sed 59000 @7.008 5000 633.3333 1100
a. 3o.
b. &he cost o! makin model 1 slip rins can increase by H- without chanin the solution.
c. 3o. &he allowable decrease on the ob'ective coe!!icient !or buyin model " slip rins is H1-.
d. 3o. &here is presently a surplus o! -58 hours in the wirin department. Mvertime would only add to
this surplus.
e. Bes. Harnessin represents a bindin constraint with a shadow price o! -H5. Each additional unit o!
this resource 1up to 4**.**2 will reduce costs by H5. Since workers are paid an additional H4 per hour
!or overtime$ the company could save H4**.**.
!. See spider chart in the !ile. ?osts are most sensitive to reductions in the harnessin re(uirements !or
model 1 slip rins.
1". See !ile+ ,rb-.1".xlsm
&otal :evenue 7 H""6$"G6

Adjustable Cells
$C$4 #"ts &!odu'ed Cout!5 405.80 0.00 350 1E+30 50
$D$4 #"ts &!odu'ed Cote).o!a!5 173.$1 0.00 450 75 1266.666667
Cost!a"ts
$C$4 #"ts &!odu'ed Cout!5 405.80 0.00 0 28$.8550725 1E+30
$D$4 #"ts &!odu'ed Cote).o!a!5 173.$1 -65.22 0 238.0$52381 114.8148148
$E$8 2oute! #sed $56.52 0.00 1000 1E+30 43.47826087
$E$$ -ade! #sed 29000.00 110.14 2000 $0.$0$0$0$1 2000
$E$10 &ol"s,e! #sed 19275.36 0.00 1500 1E+30 224.6376812
a. 3o. &here is already a surplus o! routin capacity.
b. Bes. &hey should be will to pay H116.1- per unit 1above and beyond what they already pay2 !or up to
NG6 additional units.
c. 3othin. &here is already a surplus o! polishin capacity.
d. &he price would have to decrease by more than H1"44.45. ?urrently$ the company only makes H-86 on
this item. So this price reduction would actually result in the company sellin this item at a loss. &he
constraint re(uirin at least *6E o! the production to consist o! contemporary tables creates this
anomaly.
1*. See !ile+ ,rb-.1*.xlsm
De'"s"o Va!"able Cells
$7$6 +a,oe 23.57142857 0.00 450 300.0000007 50.00000007
$C$6 &a'"A"' 15 0.00 1150 42.857142$6 714.2857144
$D$6 -a>aa, 40.71428571 0.00 800 100.0000001 16.66666682
$E$6 As.e 0 -7.142857143 400 7.142857143 1E+30
Cost!a"ts
$%$1
0 /lue #sed 69000 0.428571 6000 1500 25$0.$0$0$1
$%$11 &!ess"1 #sed 79500 7.142857 7500 3300 1500
$%$1
2 &"e ',".s #sed 309000 0.142857 30000 27333.33333 8250
$%$1
3 *a< ',".s #sed 339214 0.000000 62500 1E+30 2$285.7142$
a. 3o.
b. Bes.
c. 3o$ the price on &ahoe panels can o down by H86 without chanin the optimal solution.
d. Bes$ the allowable increase on the pro!it coe!!icient !or pallets o! 9spen panels is H5.1-$ so the
solution would chane.
e. &his is a bindin constraint with a shadow price o! NH5.1- and an allowable increase o! *$*66. &hey
should be willin to pay NH51-* !or 1$666 additional units o! pressin capacity.
!. ,ine chips are a bindin constraint worth NH6.1- per pound. :educin the amount available by 8$666
pounds would reduce pro!it by about H51-. )! they could sell the same 8$666 pounds !or H1$"86 they
should do so as they would be ahead by H1"86 - H51-.
. ,ro!it is most sensitive to chanes in pressin capacity.
h. 9s pressin capacity increases !rom 8666 to 4666$ we make !ewer &ahoes and more Savannahs.
#eyond 4666$ we start makin ,aci!ics and !ewer Savannahs.
Pressing .a+oe Pacific Savanna+ #spen Profit
37300 3836 3%36 3*36 3E36 3!39
59000 42.85714286 0 28.57142857 0 $429143
59500 38.57142857 0 35.71428571 0 $459$2$
69000 34.2857142$ 0 42.85714286 0 $4$9714
69500 30.71428571 5 42.14285714 0 $539286
79000 27.14285714 10 41.42857143 0 $569857
1-. See !ile+ ,rb-.1-.xlsm
Decision Variable Cells
Cell Name
Final
Value
Reduce
d
Cost
Objectiv
e
Coefci
ent
Allowabl
e
Increase
Allowable
Decrease
$C$11 Feed 1 15 -3.250 2 3.25 1E+30
$D$11 Feed 2 9.5 0.000 2.5 1E+30 1.500000033
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-G
$E$11 Feed 3 8.5 0.000 3

4.500000
1 6.5000002
Constraints
Cell Name
Final
Value
Shadow
Price
Constrai
nt
R..
Side
Allowabl
e
Increase
Allowable
Decrease
$F$6 in ! 98 0.00 64 34 1E+30
$F$" in # 80 2.50 80 5.5 9
$F$8 in C 32 0.00 16 16 1E+30
$F$9 in D 200 0.00 128 "2 1E+30
$F$6 a$ ! 98 0.00 128 1E+30 30
$F$" a$ # 80 0.00 160 1E+30 80
$F$8 a$ C 32 -2.25 32
6.333333
333 3.66666666"
$F$9 a$ D 200 0.00 256 1E+30 56
a. 3o.
b. Bes.
c. Feed 1 is at its upper bound$ increasin it !urther 1i! possible2 would reduce the ob'ective !unctionO
hence its neative reduced cost. Feeds " and * are between the upper and lower bounds and the!ore
have reduced costs o! %ero. 1)! there reduced costs were not %ero$ that would indicate !urther
imporvements could be made in the ob'ective by chanin their values.2
d. 9 cost increase o! H* !or Feed * is within the rane o! its allowable increaseO so the optimal solution
would not chane but the ob'ective !unction would chane 1increase2 by H*L0.87H"8.86.
e. )! possible$ they should reduce the minimum re(uirement !or nutrient #. )t is bindin at its lower
bound and loosenin that re(uirement would improve the ob'ective by H".8 per unit loosened 1up to G
units2.
!. )! possible$ they should increase the maximum re(uirement !or nutrient ?. )t is bindin at its upper
bound and loosenin that re(uirement would improve the ob'ective by H"."8 per unit loosened 1up to
4.*** units2.
. 9ll the costs coe!!icients vary in a positive linear !ashion with total cost with chanes in the cost o!
Feed 1 havin the reatest impact.

*bje't">e Cell @(a68
%ell &a'e
!inal
(alue
$%$6 +otal &!oA"t 6$25
$7$5 :uat"t5 &!odu't 1 6.67 0.00 $0
8.33333E-
0$ 3.7500006
$C$5 :uat"t5 &!odu't 2 41.25 0.00 120 6.6666678 1.11111E-08
$D$5 :uat"t5 &!odu't 3 $.17 0.00 150 30.000005 30.000003
Cost!a"ts
$E$$ (a',"e 1 ?!s #sed 105 0 400 1E+30 2$5
$E$1
0 (a',"e 2 ?!s #sed 240 15 240 6.66666667 18.3333333
$E$11 (a',"e 3 ?!s #sed 320 0 320 3.33333333 27.5
$E$1
2 +otal Babo! ?!s #sed 665 5 665 50.4166667 5
a. 3o.
b. &he shadow price is H6 indicatin that additional units o! this resource will not help increase pro!it as this
is a non-bindin constratint.
c. &he shadow price is H8$ indicatin that additional units o! labor would help to increase pro!its provided
they can be obtained at no more than H8 per hour above the current labor cost.
d. &he allowable decrease on the ob'ective !unction coe!!icient !or product " is H6. So i! that coe!!icient is an
estimate it has no Pwile roomQ in the downward direction without a!!ectin the optimal solution.
*bje't">e Cell @("8
%ell &a'e
!inal
(alue
$?$7 Cost C lb +otal 5.85
%oefficien
t )ncrease *ecrease
$C$6 A)out @lbs8 2a"s"s 0.75 0 2.5 0.2000000 1E+30
$D$6 A)out @lbs8 /!a" 0.1 0 1.5 1E+30 0.500000
$E$6
A)out @lbs8
C,o'olate 0.1 0 2 1E+30 0.500000
$%$6 A)out @lbs8 &eauts 0.$5 0 3.5 1E+30 0.333333
$/$6 A)out @lbs8 Al)ods 0.1 0 3 1E+30 2.500000
Cost!a"ts
$?$10
V"ta)"s @1!a)s8
+otal 47.5 0 40 7.5 1E+30
$?$11
("e!als @1!a)s8
+otal 15 0.5 15 0.1 0.5
$?$12 &!ot"e @1!a)s8 +otal 12.$ 0 10 2.$ 1E+30
$?$13 Calo!"es +otal 738.5 0 600 138.5 1E+30
$?$6 A)out @lbs8 +otal 2 -0.825 2 0.068$65 0.013245
$C$6 A)out @lbs8 2a"s"s 0.75 0 0 0.65 1E+30
$D$6 A)out @lbs8 /!a" 0.1 0.5 0 0.033333 0.1
$E$6
A)out @lbs8
C,o'olate 0.1 0.5 0 0.05 0.125
$%$6 A)out @lbs8 &eauts 0.$5 0 0 0.85 1E+30
$/$6 A)out @lbs8 Al)ods 0.1 2.5 0 0.025 0.0833333
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-1"
$C$6 A)out @lbs8 2a"s"s 0.75 0 0 1E+30 0.25

$D$6 A)out @lbs8 /!a" 0.1 0 0 1E+30 0.$
$E$6
A)out @lbs8
C,o'olate 0.1 0 0 1E+30 0.$
$%$6 A)out @lbs8 &eauts 0.$5 0 0 1E+30 0.05
$/$6 A)out @lbs8 Al)ods 0.1 0 0 1E+30 0.$
a. 3o.
b. Bes$ it has a maximum allowable increase o! H6."6 1or to H".562.
c. 3o$ it has a maximum allowable decrease o! H6.** 1or to H*.152.
d. &he constraint on the mineral content o! the mix is bindin and$ there!ore$ would lead to a reduction
in the price o! the mix i! this constraint could be loosened.
&otal ,ro!it 7 H"18$666
Adjustable Cells
$7$4 :uat"t5 (ade ?5.e!B"< 500 -43.66666667 53 43.66666667 1E+30
$C$4 :uat"t5 (ade %astB"< 1000 0 48 16 1E+30
$D$4 :uat"t5 (ade -.eedB"< 1500 0 33 15 1
$E$4 :uat"t5 (ade ("'!oB"< 2250 0 32 1 5.272727273
$%$4 :uat"t5 (ade Et,e!B"< 500 -$.666666667 38 $.666666667 1E+30
Cost!a"ts
$/$13 &C 7oa!d @sD "8 #sed 609500 0 80000 1E+30 1$500
$/$14 2es"sto!s #sed 1009000 0 100000 10500 6000
$/$15 (e)o!5 ',".s #sed 309000 7.5 30000 2000 2333.333333
$/$16 Asse)bl5 ?ou!s #sed 39688 0 5000 1E+30 1312.5
$/$17 %astC?5.e!E2 #sed 0 16 0 500 875
a. &he constraints on the number o! resistors and memory chips are bindin. 9lso the constraint
re(uirin twice as many Fastlink cards as Hyperlink cards is bindin.
b. Hyperlinks. &he company would earn H-*.45 !or each Hyperlink it could avoid producin.
c. Bes. ,ro!its would increase by H5.8<1$6667H5$866.
d. &he solution would chane i! the ob'ective coe!!icients on the Speedlink decreased by H1 or i! the
ob'ective coe!!icient on the Ficrolink increased by H1. &hus$ the ob'ective coe!!icients on these
products would be o! reatest concern.
e. See the !ile. &otal pro!it appears to be most sensitive to chanes in the unit pro!it !or Ficrolinks.
&otal ?ost 7 H"$G586$666
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-1*
Adjustable Cells
$7$4 Fu)be! to (a<e Ele't!"' 309000 0 55 7.000000003 1E+30
$C$4 Fu)be! to (a<e /as 109000 0 85 10 14.00000001
$7$5 Fu)be! to 7u5 Ele't!"' 0 7 67 1E+30 7.000000003
$C$5 Fu)be! to 7u5 /as 59000 0 $5 14.00000001 10
Cost!a"ts
$7$10 +otal A>a"lable Ele't!"' 309000 60 30000 20000 10000
$C$10 +otal A>a"lable /as 159000 $5 15000 1E+30 5000
$D$14 &!odu't"o #sed 109000 -25 10000 800 4000
$D$15 Asse)bl5 #sed 149000 0 15000 1E+30 1000
$D$16 &a'<a1"1 #sed 49000 0 5000 1E+30 1000
a. &he current solution remains optimal until the cost o! producin electric trimmers increases by H5 to
H4".
b. &he solution would not chane. &he allowable increase is H16.
c. &he shadow price in the assembly area is %ero. &here is already a surplus o! assembly capacity so the
company should not pay anythin to ac(uire more o! it.
d. &he company should be willin to pay H"8 per production hour above and beyond what it is already
payin. ,roduction capacity is a bindin constraint.
e. See the !ile. &otal pro!it is most sensitive to the cost o! makin the electric trimmer.
!. Every 166 unit increase in production capacity results in "86 more as trimmer bein made instead o!
bouht.
1G. See !ile+ ,rb-.1G.xlsm
%ell &a'e
!inal
(alue
$C$13
+otal .!oA"t
7as<ets 1526.5
*ecision (ariable %ells
%oefficien
t )ncrease *ecrease
$C$6 7as<ets 3 0 2.5 1.5$502E-07 2.23607E-07
$D$6 Gu"'e 87 0 1.75 2.23607E-07 1.5$502E-07
$C$7 7as<ets 0 0 2.5 0 1E+30
$D$7 Gu"'e 225 0 1.75 1E+30 2.11058E-07
$C$8 7as<ets 114 0 2.5 1.11803E-07 5.31672E-08
$D$8 Gu"'e 186 0 1.75 5.31672E-08 1.11803E-07
$C$$ 7as<ets 0
7.0832$E-
16 2.5 0 1E+30
$D$$ Gu"'e 100 0 1.75 1E+30 7.$7508E-08
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-1-
$C$10 7as<ets 75 0 2.5 1E+30 2.23607E-07

$D$10 Gu"'e 0 -7.4476E-16 1.75 7.4476E-16 1E+30
Cost!a"ts
$C$17
A'tual 01,td
/!ade 7as<ets 720 -0.6 0 15 310
$D$17
A'tual 01,td
/!ade Gu"'e 14$5 -0.6 0 103.6363636 10
$E$6 +otal $0 0.85 $0 6$.0$0$0$0$ 6.666666667
$E$7 +otal 225 1.45 225 207.2727273 20
$E$8 +otal 300 2.05 300 20 207.2727273
$E$$ +otal 100 2.65 100 6.666666667 6$.0$0$0$0$
$E$10 +otal 75 3.25 75 248 12
a. H1$8"4.8
b. Bes. Some students miht already have this solution. Bou tend to et a di!!erent 1alternate2 optimal
solution dependin on whether you use the Standard J, enine or the Rurobi enine. Either way$ to
make sure the solver is usin the most rade 8 oranes !or !ruit baskets$ students should try to
maximi%e that (uantity while holdin the optimal pro!it at H18"4.8 as a constraint.
Pounds used for
7rade 8as:ets ;uice
1 0 $0
2 61.5 163.5
3 0 300
4 55.5 44.5
5 75 0
c. Bes. &he shadow price on rade - oranes is H".48 with an allowable increase in the resource o!
4.4445 1in 1666s2.
d. See !ile. )ncreases in the re(uirements !or the !ruit baskets have the least neative impact on pro!it.
"6. See !ile+ ,rb-."6.xlsm
%ell &a'e !inal (alue
$E$16
+otal
&!oA"t 5012.5

$E$5 2e1ula! 150.00 0.00 3.75 1E+30 0.0000001
$%$5 -u.!e)e 0.00 0.00 7.75 0 1E+30
$E$6 2e1ula! $5.65 0.00 5.25 2.0$0$1E-08 2.0000001

$%$6 -u.!e)e 254.35 0.00 $.25 1E+30 2.0$0$1E-08
$E$7 2e1ula! 54.35 0.00 3.25 1.76$23E-07 2.0$0$1E-08
$%$7 -u.!e)e 1$5.65 0.00 7.25 2.0$0$1E-08 1.76$23E-07
Cost!a"ts
$E$11
A'tual *'tae
Be>el 2e1ula! $7.6667 0.0000 $0 7.666666667 1E+30
$%$11
A'tual *'tae
Be>el -u.!e)e $7.0000 0.0000 $7 2.777777778 4.88888888$
$E$8 A>a"lable 2e1ula! 300 3.25 300 50 20.$0$0$0$1
$%$8
A>a"lable
-u.!e)e 450 7.25 450 20 11.36363636
$/$5 #sed 150 0.5 150 54.3478260$ 50
$/$6 #sed 350 2 350 54.3478260$ 50
$/$7 #sed 250 0 300 1E+30 50
a. Bes$ as re!lected by the allowable increases and decreases o! %ero on an ob'ective coe!!icients.
b. 3ote that the sensitivity in!ormation cannot be used to answer this 1and the !ollowin2 (uestions.
9dd a constraint holdin the ob'ective at its optimal value and then maximi%e E11 and F11
separately. :eular octane ratin 7 G5.45$ supreme octane ratin 7 G5.
c. :eular octane ratin 7 G6.6$ supreme octane ratin 7 16".11.
d. &he solution in part c should be implemented. &he company would receive neative publicity i! the
answer in part b were implemented and the public learned that the inexpensive reular as had a
hiher octane ratin than the more expensive supreme as.
e. &his cannot be answered !rom the iven in!ormation. #ased on the above sensitivity report$ they
should be willin to buy an additional N8- barrels at this price$ but beyond that the shadow price it
not uaranteed to hold.
&otal ?ost 7 H5*6
Adjustable Cells
$C$10 Bo'at"o 1 Bo'at"o 3 0 26 54 1E+30 26
$D$10 Bo'at"o 1 Bo'at"o 4 10 0 17 5 1E+30
$E$10 Bo'at"o 1 Bo'at"o 5 1 0 23 2 5
$%$10 Bo'at"o 1 Bo'at"o 6 5 0 30 5 2
$C$11 Bo'at"o 2 Bo'at"o 3 $ 0 24 2 5
$D$11 Bo'at"o 2 Bo'at"o 4 0 5 18 1E+30 5
$E$11 Bo'at"o 2 Bo'at"o 5 $ 0 1$ 5 2
$%$11 Bo'at"o 2 Bo'at"o 6 0 5 31 1E+30 5
Cost!a"ts
$C$12 A'tual Bo'at"o 3 $ 0 10 1E+30 1
$D$12 A'tual Bo'at"o 4 10 -11 10 1 1

$E$12 A'tual Bo'at"o 5 10 -5 10 4 1
$%$12 A'tual Bo'at"o 6 5 0 10 1E+30 5
$C$12 Bo'at"o 3 2e'e">ed $ 0 5 4 1E+30
$D$12 Bo'at"o 4 2e'e">ed 10 0 5 5 1E+30
$E$12 Bo'at"o 5 2e'e">ed 10 0 5 5 1E+30
$%$12 Bo'at"o 6 2e'e">ed 5 2 5 1 1
$/$10 Bo'at"o 1 -,"..ed 16 28 16 1 1
$/$11 Bo'at"o 2 -,"..ed 18 24 18 1 4
a. Bes. 3one o! the allowable increases or decreases on the ob'ective !unction coe!!icients are %ero.
b. Jocation 4.
c. H"4
d. &he allowable increase !or the :HS o! the last constraint is 1 so the shadow price o! this constraint
will not hold i! the :HS is increased !rom 8 to 0. &hus$ this (uestion cannot be answered with the
in!ormation available in this sensitivity report.
"". See !ile+ ,rb-."".xlsm
&otal ?ost 7 H56"
Adjustable Cells
$C$10 Bo'at"o 1 Bo'at"o 3 0 31 54 1E+30 31
$D$10 Bo'at"o 1 Bo'at"o 4 10 0 17 5.0000001 0.0000001
$E$10 Bo'at"o 1 Bo'at"o 5 0 5 23 1E+30 5
$%$10 Bo'at"o 1 Bo'at"o 6 5 0 30 0.0000001 7.0000001
$C$11 Bo'at"o 2 Bo'at"o 3 8 0 24 7.0000001 5.0000001
$D$11 Bo'at"o 2 Bo'at"o 4 0 0 18 0.0000001 5.0000001
$E$11 Bo'at"o 2 Bo'at"o 5 10 0 1$ 5.0000001 1E+30
$%$11 Bo'at"o 2 Bo'at"o 6 0 0 31 1E+30 0
Cost!a"ts
$C$12 A'tual Bo'at"o 3 8 0 10 1E+30 2
$D$12 A'tual Bo'at"o 4 10 -6 10 3 0
$E$12 A'tual Bo'at"o 5 10 -5 10 3 2
$%$12 A'tual Bo'at"o 6 5 0 10 1E+30 5
$C$12 A'tual Bo'at"o 3 8 0 5 3 1E+30
$D$12 A'tual Bo'at"o 4 10 0 5 5 1E+30
$E$12 A'tual Bo'at"o 5 10 0 5 5 1E+30
$%$12 A'tual Bo'at"o 6 5 7 5 3 0
$/$10 Bo'at"o 1 -,"..ed 15 23 15 0 3
$/$11 Bo'at"o 2 -,"..ed 18 24 18 2 3
a. 3o. 9t least one o! the allowable increases or decreases on the ob'ective !unction coe!!icients is %ero.
b. H*1.
c. H*1.
"*. See !ile+ ,rb-."*.xlsm
&otal ?ost 7 H*$611$*46

Adjustable Cells
$7$15 (a'o +a'o)a 0 0.55 38 1E+30 0.55
$C$15 (a'o -a D"e1o 0 1.8 38.25 1E+30 1.8
$D$15 (a'o Dallas 0 0.25 37.25 1E+30 0.25
$E$15 (a'o De>e! 0 1.1 37.5 1E+30 1.1
$%$15 (a'o -t. Bou"s 0 1 37.6 1E+30 1
$/$15 (a'o +a).a 12000 0 37.3 0.1 0.85
$?$15 (a'o 7alt")o!e 6000 0 37.15 0.25 0.1
$7$16 Bou"s>"lle +a'o)a 600 0 3$.35 0.1 0.05
$C$16 Bou"s>"lle -a D"e1o 0 1.05 3$.4 1E+30 1.05
$D$16 Bou"s>"lle Dallas 0 0.1 3$ 1E+30 0.1
$E$16 Bou"s>"lle De>e! 0 0.8 3$.1 1E+30 0.8
$%$16 Bou"s>"lle -t. Bou"s 14400 0 38.5 0.05 0.15
$/$16 Bou"s>"lle +a).a 0 0.2 3$.4 1E+30 0.2
$?$16 Bou"s>"lle 7alt")o!e 0 0.3 3$.35 1E+30 0.3
$7$17 Det!o"t +a'o)a 400 0 41.3 0.05 0.05
$C$17 Det!o"t -a D"e1o 0 0.$5 41.25 1E+30 0.$5
$D$17 Det!o"t Dallas 10800 0 40.85 0.1 0.55
$E$17 Det!o"t De>e! 12600 0 40.25 0.05 1E+30
$%$17 Det!o"t -t. Bou"s 0 0.05 40.5 1E+30 0.05
$/$17 Det!o"t +a).a 0 0.1 41.25 1E+30 0.1
$?$17 Det!o"t 7alt")o!e 1200 0 41 0.1 0.25
$7$18 &,oe"6 +a'o)a 5800 0 38.15 0.05 0.15
$C$18 &,oe"6 -a D"e1o 14200 0 37.15 0.15 0.05
$D$18 &,oe"6 Dallas 0 0.15 37.85 1E+30 0.15
$E$18 &,oe"6 De>e! 0 0.$ 38 1E+30 0.$
$%$18 &,oe"6 -t. Bou"s 0 0.$5 38.25 1E+30 0.$5
$/$18 &,oe"6 +a).a 0 0.75 38.75 1E+30 0.75
$?$18 &,oe"6 7alt")o!e 0 1.05 38.$ 1E+30 1.05
Cost!a"ts
$7$1$ +otal -,"..ed +a'o)a 6800 0 8500 1E+30 1700
$C$1$ +otal -,"..ed -a D"e1o 14200 0 14500 1E+30 300
$D$1$ +otal -,"..ed Dallas 10800 0 13500 1E+30 2700
$E$1$ +otal -,"..ed De>e! 12600 -0.05 12600 400 300
$%$1$ +otal -,"..ed -t. Bou"s 14400 0 18000 1E+30 3600
$/$1$ +otal -,"..ed +a).a 12000 0 15000 1E+30 3000
$?$1$ +otal -,"..ed 7alt")o!e 7200 0 $000 1E+30 1800
$7$1$ +otal -,"..ed +a'o)a 6800 1 6800 1700 300
$C$1$ +otal -,"..ed -a D"e1o 14200 0 11600 2600 1E+30
$D$1$ +otal -,"..ed Dallas 10800 0.55 10800 400 300
$E$1$ +otal -,"..ed De>e! 12600 0 10080 2520 1E+30

$%$1$ +otal -,"..ed -t. Bou"s 14400 0.15 14400 600 300
$/$1$ +otal -,"..ed +a).a 12000 0.85 12000 400 300
$?$1$ +otal -,"..ed 7alt")o!e 7200 0.7 7200 400 300
$H$15 (a'o &!odu'ed 18000 36.45 18000 300 400
$H$16 Bou"s>"lle &!odu'ed 15000 38.35 15000 300 600
$H$17 Det!o"t &!odu'ed 25000 40.3 25000 300 400
$H$18 &,oe"6 &!odu'ed 20000 37.15 20000 300 2600
a. Bes.
b. Facon. Each additional unit o! capacity there increases costs by H*4.-8 1which is the cheapest way to
increase capacity2.
c. Bes. &he allowable increase in the ob'ective coe!!icient !or this variable is H6.68. So an H6.60
increase in shippin cost 1!rom H1.G6 to H1.G02 should 1and does2 result in a new optimal solution.
d. Bes. Several o! the P06E constraintsQ are bindin. :elaxin these constraints would allow the
company to distribute the products it can make in a less costly way to meet more o! the demand that
currently is not bein met because o! the P06E constraintsQ. 9s lon as the product sells !or the same
price in all markets$ lowerinCrelaxin the P06E constraintsQ should result in more pro!it.
e. &his would cause the total cost to increase by H1 per unit or H1566 in total. So the company would
likely want to pass this cost on to the distributor.
"-. See !ile+ ,rb-."-.xlsm
&otal ?ost 7 H--$645.5*
Adjustable Cells
$C$10 Fe;s.a.e! Fe;s.!"t 588.24 0.00 21.5 0.51$84127 24.64285714
$D$10 Fe;s.a.e! &a'<a1"1 11.76 0.00 26 3.142857143 0.51$84127
$E$10 Fe;s.a.e! &!"t -to'< 0.00 18.14 15 1E+30 18.14285714
$C$11 ("6ed &a.e! Fe;s.!"t 0.00 0.55 25.75 1E+30 0.550420168
$D$11 ("6ed &a.e! &a'<a1"1 71.43 0.00 28.25 0.550420168 1.357142857
$E$11 ("6ed &a.e! &!"t -to'< 428.57 0.00 25.5 1.357142857 26.3$285714
$C$12 0,"te *AA"'e &a.e! Fe;s.!"t 0.00 1.87 23.75 1E+30 1.87184873$
$D$12 0,"te *AA"'e &a.e! &a'<a1"1 300.00 0.00 26.75 1.551020408 1E+30
$E$12 0,"te *AA"'e &a.e! &!"t -to'< 0.00 1.55 27.5 1E+30 1.551020408
$C$13 Ca!dboa!d Fe;s.!"t 0.00 1.31 24.5 1E+30 1.30672268$
$D$13 Ca!dboa!d &a'<a1"1 3$7.78 0.00 25.5 1.21484375 0.78125
$E$13 Ca!dboa!d &!"t -to'< 0.00 17.00 17 1E+30 17
Cost!a"ts
$C$14 &ul. A>a"lable Fe;s.!"t 500.00 28.$$ 500 1.651785714 2$5.8482143
$D$14 &ul. A>a"lable &a'<a1"1 600.00 36.43 600 1.55462184$ 278.4453782
$E$14 &ul. A>a"lable &!"t -to'< 300.00 37.70 300 1.3602$4118 243.63$705$
$%$10 Fe;s.a.e! #sed 600.00 -3.14 600 348.0567227 1.$43277311
$%$11 ("6ed &a.e! #sed 500.00 -0.8$ 500 348.0567227 1.$43277311
$%$12 0,"te *AA"'e &a.e! #sed 300.00 -4.21 300 327.5827$78 1.828$66881
$%$13 Ca!dboa!d #sed 3$7.78 0.00 400 1E+30 2.220888355
a. 3o.
b. Bes.
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-1G
c. H6. &here is a surplus o! cardboard already.

d. Bes. &he recycler currently pays H18 per ton. &he shadow price is H*.1-. So the recycler should be
willin to pay up to H10.1- to ac(uire up to *-0 additional tons.
e. 3ewspaper H"0.GG$ ,ackain ,aper H*4.-*$ ,rint Stock ,aper H*5.56.
!. H1.05.
. &he yield on newsprint per ton o! cardboard would have to increase !rom 6.6 to "-.-GGGGGC"0.GG18 7
6.0-865". 1&his is the reduced cost o! usin cardboard !or newsprint divided by the marinal value
1shadow price2 o! newsprint.2
First o! all$ in!ormation about chanes to constraint coe!!icients is enerally not directly available
!rom the sensitivity report. Isually you'll want to use ad hoc sensitivity analysis 1like a Solver table2
to answer these types o! (uestions. However$ in this case$ !rom the sensitivity report we know that the
cost o! convertin 1 ton o! cardboard into 6.0 tons o! newsprint is H"-.8. 9lso$ !rom the sensitivity
report we know that the marinal value o! a ton o! newsprint is NH"0.GG18. So$ i! we spend H"-.8 to
et 6.0 tons o! newsprint worth H"0.GG18 per ton$ we'll have exchaned H"-.8 !or somethin that is
worth 6.0LH"0.GG18 7 NH"*.1G* -- so we would have lost NH1.*65 in that transaction. &hat's why we
aren't usin cardboard to make newsprint. 9lso note that N1.*65 is the reduced cost in the sensitivity
report !or the variable that represents the amount o! cardboard bein converted to newsprint.
So$ in this case$ H"-.86 - 6.0LH"0.GG18 turned out to be neative 1that is$ a bad deal where we lose
value2. Suestion boils down to askin TAhat would the 6.0 in this e(uation have to be in order to
et a non-neative valueUT So let's chane the 6.0 !actor into a variable called S. &hen$
mathematically$ we want to !ind the value o! S where H"-.86-SLH"0.GG1876.
Voin a little alebra on that ives us S 7 "-.8C"0.GG18 7 6.0-865".
So i! we could convert a ton o! cardboard into about 6.0-8 tons o! newsprint 1instead o! 6.0 tons o!
newsprint2$ it would become economically !easible to do so.
&otal ?ost 7 H44-$"66
Adjustable Cells
!inal
Reduce
d Ob"ective #llo$able #llo$able
%oefficien
t )ncrease *ecrease
$C$6 %o!;a!d 300 0 6$ 0 0.0000001
$D$6
%o!;a!d
Co))od"t5 2500 0 50 1E+30 0.0000001
$E$6 %o!;a!d 185.7142857 0 60 0.0000001 8.076$2E-08
$%$6 %o!;a!d 0 0 80 0 1E+30
$C$7 Cete! 4500 0 6$ 1E+30 6.66667E-08
$D$7
Cete!
Co))od"t5 0 0 50 0 1E+30
$E$7 Cete! 0 0 60 0 1E+30
$%$7 Cete! 0 0 80 0 1E+30
$C$8 2ea! 0 0 6$ 0 1E+30
$D$8 2ea! Co))od"t5 0 0 50 0 1E+30
$E$8 2ea! 1014.285714 0 60 0 0.0000001
$%$8 2ea! 1700 0 80 1E+30 0.0000001
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-"6
Cost!a"ts
$C$$ Boaded 4800 6$ 4800 22.5 300
$D$$
Boaded
Co))od"t5 2500 50 2500 22.5 2130
$E$$ Boaded 1200 60 1200 22.5 354.5454545
$%$$ Boaded 1700 80 1700 27.27272727 354.5454545
$/$6 %o!;a!d ;e"1,t 2$85.714286 0 3000 1E+30 14.2857142$
$/$7 Cete! ;e"1,t 4500 0 6000 1E+30 1500
$/$8 2ea! ;e"1,t 2714.285714 0 4000 1E+30 1285.714286
$H$6 %o!;a!d >olu)e 85642.85714 0 145000 1E+30 5$357.14286
$H$7 Cete! >olu)e 180000 0 180000 12000 $00
$H$8 2ea! >olu)e 154357.142$ 0 155000 1E+30 642.857142$
$D$1$ %o!;a!d )a6 I 0 0.00 0.00 0 30 22.5
$D$20 Cete! )a6 I 0 -3134.2$ 0.00 0 1E+30 3134.285714
$C$1$ %o!;a!d )" E 0 542.86 0.00 0 542.857142$ 1E+30
$C$20 Cete! )" E 0 420.00 0.00 0 420 1E+30
a. 3o.
b. 3o.
c. H6. 13ote that the allowable decrease !or three di!!erent ad'ustable cells need to be considered.2
d. &otal pro!it is most sensitive to chanes in the marinal pro!itCprice o! commodity one.
&otal cost 7 H14$4"8
Adjustable Cells
$C$6 15 0 300 175 50
$C$7 0 125 300 1E+30 125
$C$8 10 0 300 150 50
$C$$ 0 225 300 1E+30 225
$C$10 0 175 300 1E+30 175
$D$6 0 50 525 1E+30 50
$D$7 0 50 525 1E+30 50
$D$8 0 150 525 1E+30 150
$D$$ 0 325 525 1E+30 325
$E$6 Be1t, oA Bease @" )ot,s8 0 0 775 50 150
$E$7 Be1t, oA Bease @" )ot,s8 0 225 775 1E+30 225
$E$8 Be1t, oA Bease @" )ot,s8 0 275 775 1E+30 275
$%$6 5 0 850 125 75
$%$7 0 175 850 1E+30 175
$/$6 5 0 $75 175 125
Cost!a"ts

$?$6 A>a"l. 25 300 25 1E+30 15
$?$7 6 A>a"l. 10 175 10 10 0
$?$8 6 A>a"l. 20 300 20 1E+30 10
$?$$ 6 A>a"l. 10 75 10 0 5
$?$10 6 A>a"l. 5 125 5 5 5
a. Bes.
b. #ecause o! the deeneracy$ we cannot tell !rom the sensitivity report.
c. H-"8
d. &he solutions in months 1 and " do not chane within this reion.
a.
3-320
3-306 1265.47 1273.$ 1282.3 12$0.8 12$$.2 1307.6 130$.$ 130$.$ 130$.$ 130$.$ 130$.$
b. *46$666 c!$ &otal pro!it NH1930$9$03
c. NH-"$1-6
d. 9t least H168$G06
"0. a. F9/ - /
1
; " /
"
S& " /
1
; - /
"
; S
1
7 "6
* /
1
; 8 /
"
; S
"
7 18
/
1
$ /
"
$ S
1
$ S
"
6
b. W/
1
$ /
"
X$ W/
1
$ S
1
X$ W/
1
$ S
"
X$ W/
"
$ S
1
X$ W/
"
$ S
"
X$ WS
1
$ S
"
X
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-""
c.
X
1
X
2
S
1
S
2
Obe!tive "easible#
1 -"6 18 6 6 -86 no
2 8 6 16 6 "6 yes
$ 16 6 6 -18 -6 no
4 6 * 0 6 4 yes
% 6 8 6 -16 16 no
& 6 6 "6 18 6 yes
e. See table in c.
!. /
1
7 8$ /
"
7 6
. &he second constraint is bindinO the !irst is redundant.
"G. a. F9/ " /
1
; - /
"
S& -1 /
1
; " /
"
; S
1
7 0
1 /
1
; " /
"
; S
"
7 1"
1 /
1
; " /
"
- S
*
7 "
/
1
$ /
"
$ S
1
$ S
"
$ S
*
6
b. W/
1
$ /
"
$ S
1
X$ W/
1
$ /
"
$ S
"
X$ W/
1
$ /
"
$ S
*
X$ W/
1
$ S
1
$ S
"
X$ W/
1
$ S
1
$ S
*
X$
W/
1
$ S
"
$ S
*
X$ W/
"
$ S
1
$ S
"
X$ W/
"
$ S
1
$ S
*
X$ W/
"
$ S
"
$ S
*
X$ WS
1
$ S
"
$ S
*
X
c.
X
1
X
2
S
1
S
2
S
$
Obe!tive "easible#
1 -0 16 -"6 6 6 "- no
2 -1.** *.** 6 4.45 6 16.45 no
$ " 8 6 6 8 "- yes
4 " 6 16 16 6 - yes
% 1" 6 "6 6 16 "- yes
& -0 6 6 "6 -16 -14 no
' 6 " - 0 6 0 yes
( 6 4 -- 6 - "- no
) 6 - 6 - " 14 yes
1* 6 6 0 1" -" 6 no
e. See table in c.
!. &here are alternate optimal solutions. Mne is iven by /
1
7 "$ /
"
7 8$ S
*
7 8.
. &he !irst and second constraints are bindin.
*6. a. F)3 8 /
1
; * /
"
; - /
*
S& /
1
; /
"
; " /
*
- S
1
7 "
8 /
1
; * /
"
; " /
*
- S
"
7 1
/
1
$ /
"
$ /
*
$ S
1
$ S
"
6
b. W/
1
$ /
"
X$ W/
1
$ /
*
X$ W/
1
$ S
1
X$ W/
1
$ S
"
X$ W/
"
$ /
*
X$
W/
"
$ S
1
X$ W/
"
$ S
"
X$ W/
*
$ S
1
X$ W/
*
$ S
"
X$ WS
1
$ S
"
X
c.
X
1
X
2
X
$
S
1
S
2
Obe!tive "easible#
1 -".8 -.8 6 6 6 1 no
2 -6."8 6 1.1"8 6 6 *."8 no
$ 6." 6 6 -1.0 6 1 no
4 " 6 6 6 G 16 yes
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-"*
% 6 -6.8 1."8 6 6 *.8 no

& 6 6.** 6 -1.45 6 1 no
' 6 " 6 6 8 4 yes
( 6 6 6.8 -1 6 " no
) 6 6 1 6 1 - yes
1* 6 6 6 -" -1 6 no
d. See table in c.
e. &he optimal solution is /
*
7 1$ S
"
7 1.
!. &he !irst constraint is bindin.
*1. a. "/
1
; -/
"
14
b. i. S7-
ii. S76
iii. S7"
iv. S7-
*". a. *
1
; -/
"
1"
b. i. S7*
ii. S7"
iii. S71*
iv. S76
Case 4-1: A +,t Case
See !ile+ ?ase-.1.xlsm.
1. 3o. &he !ixed costs should not be included in the calculation o! unit pro!it marins.
". /1 7 pounds o! Ahole product to produce
/" 7 pounds o! ?luster product to produce
/* 7 pounds o! ?runch product to produce
/- 7 pounds o! :oasted product to produce
F9/ 1.G* /1 ; 1.6- /" ; 1.18 /* ; 1.** /-
S& 1 /1 ; 1 /" ; 1 /* ; 1 /- D *466
" /1 ; 1.8 /" ; 1 /* ; 1.58 /- D *466
1 /1 ; 6.5 /" ; 6." /* ; 6.66 /- D *466
".8 /1 ; 1.4 /" ; 1."8 /* ; 1.6 /- D *466
6.4 /1 ; 6.- /" ; 6." /* ; 1 /- D 1166
6.- /1 ; 6.4 /" ; 6.0 /* ; 6 /- D 066
1$666 D /1 D GG$GGG
-66 D /" D 866
6 D /* D 186
6 D /- D "66
*. See !ile+ ?ase-.1.xlsm
-. /1 7 16"G$ /" 7 -66$ /* 7 186$ /-7"66$ &otal pro!it 7 H"$0*G.54
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-"-
8.
4. 3o.
5. Bes.
0. &he company could increase pro!it by makin !ewer pounds o! the ?luster product 1it has a neative
reduced cost2.
G. Each additional unit o! the :oasted product adds about H6.88 to pro!it.
16. ,ackain is the only bindin constraint 1aside !rom the upper and lower variable bounds2. Each
additional unit o! packain material is worth H6.55" 1above and beyond its normal variable cost2.
11. H6. )t is a non-bindin resource.
1". 3o$ it could decrease by H6.*68 without chanin the optimal solution.
1*.
&he Ahole product is the only one that would be e!!ected. &he solution appears to be rather insensitive to
chanes in re(uired roastin times.
1-.
3ote that scenarios 1 Y " !or ?hocolate are in!easible.
Case 4-2: -ar.et Sisters

1contributed by Zack Burkiewic%$ ,ace Iniversity2
Jet /
1
7 ballpoints produced$ /
"
7 pencils produced$ /
*
7 !ountain pens produced
&he J, !ormulation !or this problem is+
F9/ *.6/
1
; *.6/
"
; 8.6/
*
S& 1."/
1
; 1.5/
"
; 1."/
*
1666
6.0/
1
; 6.6/
"
; ".*/
*
1"66
".6/
1
; *.6/
"
; -.8/
*
"666
/
1
$ /
"
$ /
*
6
See !ile+ ?ase-.".xlsm.
&otal ,ro!it 7 H"$544.45
&he sensitivity report is shown below+
Adjustable Cells
$7$2 Fu)be! to &!odu'e: 7all.o"ts 700.00 0.0000 3 2.000 0.778
$C$2 Fu)be! to &!odu'e: &e'"ls 0.00 -1.3833 3 1.383 1.00E+30
$D$2 Fu)be! to &!odu'e: %outa"
.es
133.33 0.0000 5 1.750 2.000
Cost!a"ts
$E$6 &last"' +otal #sed: 1000.00 1.1667 1000 200.000 466.667
$E$7 C,!o)e +otal #sed: 866.67 0.0000 1200 1.00E+30 333.333
$E$8 -ta"less -teel +otal #sed: 2000.00 0.8000 2000 555.556 333.333
1. &he optimal weekly product mix is+ 566 ballpoints$ 6 pencils$ and 1**.** !ountain pens. Ae could round
the !ountain pens o!! to 1**$ but we shall not$ in order to avoid roundin problems. &he pro!it is
H"$544.45.
". 3o. 3one o! the allowable increases or decreases on the constraints are %ero.
*. Bes$ the answer is uni(ue. )n the absence o! deeneracy$ we see that there are no variables which have a
value o! %ero and simultaneously a %ero reduced cost.
-. Ahat is the marinal values !or one more unit o! each o! the resources are+ H1.15 !or plastic$ 6 !or chrome$
and H6.06 !or stainless steel. &hese are the shadow prices !or our three resources.
8. Ae can consider buyin the 866 additional ounces o! stainless steel because 866 is less than the maximum
allowable increase o! 888.84 ounces. &hus$ the shadow price !or stainless steel 1and the other resources as
well2 remains the same. 3ow as to whether or not the deal is worthwhile$ because the 06 cent shadow
price !or an additional ounce o! stainless steel is more than the 46 cents the distributor is charin ,arket
1above which they ordinarily chare when the model was !ormulated2$ it pays to buy the 866 ounces they
are willin to sell. ,arket will Pbe aheadQ "6 cents !or each ounce they buy.
4. #ecause we are buyin the 866 ounces$ each ounce bouht will increase our pro!it by "6 cents. &hus the
866 ounces will increase our pro!it by 866<H6."6 7 H166. Mur new pro!it is then H"544.45 ; H166 7
H"044.45. Mnce we chane the :HS o! a constraint$ we enerally cannot tell what the new product mix
will be. &o et that$ we must re-solve the problem.
5. Ae cannot tell without re-solvin the problem. Five hundred additional ounces o! plastic is above the
allowable increase o! "66 ounces. &hat is$ we are uaranteed that the shadow prices iven will remain the
same so lon as we have no more than 1"66 11666 ; "662 ounces o! plastic. 9bove that value$ the shadow
prices are di!!erent that those iven. &hus$ we cannot make any analysis at this point.
0. Ae can buy as many as "66 additional ounces o! plastic be!ore we Prun out o! in!ormationQ !rom the
computer output. ,arket ordinarily pays H8.66 per ounce$ and now the distributor is charin H4.66 per
ounce$ or H1.66 more than ,arket paid. Still$ the shadow price !or plastic is H1.15 1or H1.1445 to be exact2
which is more than the H1.66 the distributor is Povercharin.Q ,arket will still be ahead about 15 cents
1or 14.4445 cents2 !or each ounce they buy. #uyin the "66 ounces will increase their pro!it by 1"662
1H6.152 7 H*- 1or H**.** to be exact2. &he new pro!it will thus be H"544.45 ; H**.** 7 H"066.66. 9ain$
we cannot tell what the new product mix will be without re-solvin the problem.
G. Ae can consider sellin the *66 ounces o! plastic because the allowable decrease o! plastic is -44.45. &hat
is$ ,arket can have as little as 8**.** ounces o! plastic 11666 - -44.452 and still be assured that the
shadow price plastic 1and the others2 will remain the same. Sellin an ounce o! plastic reduces ,arket>s
pro!it by H1.15 1or H1.1445 to be exact2$ yet the company is willin to pay H4.86 per ounce. &his
represents a yield o! H1.86 above what ,arket ordinarily pays 1they pay H8.66 per ounce$ i! you recall2.
&hus ,arket will be ahead by 1H1.86 - H1.14452<*66 7 H166 i! they sell the plastic. &he new pro!it will be
H"544.45 ; H166 7 H"044.45. Mnce aain$ we cannot tell what the new product mix will be unless we
solve the problem.
16. ,arket had ordered 1"66 ounces o! chrome$ yet the optimal solution uses only 044.45 ounces. &here are
***.** ounces le!t over. &hat is why the shadow price !or chrome is %ero. )! only 1666 ounces are
delivered$ ,arket will still have 1**.** ounces o! chrome le!t over. #ecause the shadow price is %ero$ and
the "66 ounce shortae !rom the distributor 11"66 - 16662 is less than the allowable decrease o! ***.**
ounces$ the shadow price is still %ero. &hus the new pro!it will not chane and remain at H"544.45. Ae
do not have to solve the problem aain here to et the new product mix. &he product mix stays the same
as+ 566 ballpoints$ %ero pencils$ and 1**.** !ountain pens. &he only di!!erence is that the slack !or
chrome is now 1**.**$ instead o! the oriinal ***.**.
11. ,rice out the new desin. )t is ,ro!it - ?ost 7 H* - [11.121H1.152 ; 1"21H62 ; 1"21H6.062\ 7 H6.1"$
approximately. #ecause this value is positive$ ,arket should ive the o-ahead !or this new desin.
1". )! the pro!it on ballpoints were to decrease to H".86$ down !rom the oriinal assumed H*.66$ this H6.86
decrease is still less than the allowable decrease o! H6.50 !or ballpoints. &he optimal solution stays the
same$ but the total pro!it now drops by 1H*.66 - H".8621566 ballpoints2 7 H*86. &he new pro!it is
H"-14.45.
1*. ,rice out the new !elt tip pen+ ,ro!it -?ost 7 ,ro!it - [11.021H1.1452 ; 16.821H62 ; 11.*21H6.062\ 7 ,ro!it
-*.1-. )! we are to produce the !elt tip then this amount should be nonneative. &hus$ ,ro!it -*.1- 6$ or
,ro!it H*.1-. 9t exactly H*.1-$ we have alternative optima and would be indi!!erent between producin
or not producin the !elt tip pens.
1-. )t should be at least H-.*0 1H*.66 plus the reduced cost o! H1.*02.
18. ?urrently it does not pay to make pencilsO the pro!it o! H*.66 is not hih enouh. Bet i! ,arket insists on
makin "6 pencils per week$ their pro!it would be down by 1"621H1.*0*2 7 H"5.44. &hat is$ they would
have a total pro!it o! H"544.45 - H"5.44 7 H"5*G.
14. 9t H4.58$ or H1.58 more than the assumed H8.66$ we are 'ust at the limit o! the allowable increase !or the
pro!it o! !ountain pens. Ae have alternative optima at this point. Still$ the optimal solution stays the
same. &he new pro!it is H"544.45 ; 1H1.58211**.** !ountain pens2 7 H*666.
Case 4-$: /amm 0nd,stries
See !ile+ ?ase-.*.xlsm
1. &otal cost+ H1$G6"$04-
Ma:e
%arpet *obbie Pantera 8uy
1 0 a 149000
2 529000 a 0
3 449000 a 0
4 209000 a 0
5 0 779500 0
6 0 0 10$9500
7 0 1209000 0
8 0 549075 59$25
$ 79500 0 0
10 0 6$9500 0
11 229041 0 46945$
12 0 839000 0
13 0 109000 0
14 0 3819000 0
15 0 649000 0
Microsoft Excel Sensitivity Report
Adjustable Cells
$C$6 Dobb"e 0 0 2.66 1E+30 0.0228248
$C$7 Dobb"e 529000 0 2.55 0.0550$5$ 1E+30
$C$8 Dobb"e 449000 0 2.64 0.08058$8 1E+30
$C$$ Dobb"e 209000 0 2.56 0.02$2481 1E+30
$C$10 Dobb"e 0 0 1.61 1E+30 0.0080232
$C$11 Dobb"e 0 0 1.62 1E+30 0.0173$36
$C$12 Dobb"e 0 0 1.64 1E+30 0.024807$
$C$13 Dobb"e 0 0 1.48 1E+30 0.0040811
$C$14 Dobb"e 79500 0 1.5 0.0071038 1E+30
$C$15 Dobb"e 0 0 1.44 1E+30 0.0162417
$C$16 Dobb"e 229041 0 1.64 0.0022523 0.00$$1
$C$17 Dobb"e 0 0 1.57 1E+30 0.0043207
$C$18 Dobb"e 0 0 1.4$ 1E+30 0.004458$
$C$1$ Dobb"e 0 0 1.31 1E+30 0.0033658
$C$20 Dobb"e 0 0 1.51 1E+30 0.001$$73
$D$10 a 779500 0 1.6 0.0080232 1E+30
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-"G
$D$11 a 0 0 1.61 1E+30 0.0133342

$D$12 a 1209000 0 1.61 0.0010843 1E+30
$D$13 a 549075 0 1.47 0.005436$ 0.0008738
$D$14 a 0 0 1.5 1E+30 0.0071038
$D$15 a 6$9500 0 1.42 0.0162417 1E+30
$D$16 a 0 0 1.64 1E+30 0.0075$32
$D$17 a 839000 0 1.56 0.0043207 1E+30
$D$18 a 109000 0 1.48 0.004458$ 1E+30
$D$1$ a 3819000 0 1.3 0.0033658 1E+30
$D$20 a 649000 0 1.5 0.001$$73 1E+30
3E36 a 7u5 149000 0 2,99 0.0228248 1E+30
$E$7 a 7u5 0 0 2.73 1E+30 0.0550$5$
$E$8 a 7u5 0 0 2.85 1E+30 0.08058$8
$E$$ a 7u5 0 0 2.73 1E+30 0.02$2481
$E$10 7u5 0 0 1.76 1E+30 0.0415$17
3E300 7u5 10$9500 0 0,96 0.0133342 1E+30
$E$12 7u5 0 0 1.76 1E+30 0.0010843
3E30< 7u5 59$25 0 0,1= 0.0008738 0.005436$
$E$14 7u5 0 0 1.71 1E+30 0.0$53073
$E$15 7u5 0 0 1.63 1E+30 0.0$13$51
3E306 7u5 46945$ 0 0,4 0.0075$32 0.0022523
$E$17 7u5 0 0 1.78 1E+30 0.0702167
$E$18 7u5 0 0 1.63 1E+30 0.008$$08
$E$1$ 7u5 0 0 1.44 1E+30 0.01$$327
$E$20 7u5 0 0 1.6$ 1E+30 0.040111$
Cost!a"ts
$%$6 a +otal 149000 2,99/ 14000 1E+30 14000
$%$7 a +otal 529000 2.675 52000 28234.6$5 52000
$%$8 a +otal 449000 2.76$ 44000 27251.544 44000
$%$$ a +otal 209000 2.701 20000 25055.643 20000
$%$10 +otal 779500 1.718 77500 54802.416 6004.1565
$%$11 +otal 10$9500 0,96/ 10$500 1E+30 10$500
$%$12 +otal 1209000 1.75$ 120000 43575.3$2 4774.123
$%$13 +otal 609000 0,1=/ 60000 1E+30 5$24.514
$%$14 +otal 79500 1.615 7500 30748.502 7500
$%$15 +otal 6$9500 1.53$ 6$500 54711.54$ 5$$4.2012
$%$16 +otal 689500 0,4// 68500 1E+30 46458.57
$%$17 +otal 839000 1.710 83000 43322.$85 4746.46$3
$%$18 +otal 109000 1.621 10000 46018.683 5041.8101
$%$1$ +otal 3819000 1.420 381000 54045.1$7 5$21.1$56
$%$20 +otal 649000 1.650 64000 432$2.6$7 4743.150$
$H$21
#sed
?!CJd 32370 -0.5$$0 32370 12408.806 5887.1342
$K$21 #sed a 172640 -0.6427 172640 1106.1453 100$6.245
". 3o.
*. Bes.
Chapter 4 - Sensitivity Analysis & The Simplex Method : S-*6
-. &he shadow price !or capacity on the Vobbie looms is -6.8GG per hour. Josin one loom !or the (uarter
results in 1*<15<"--"27"180 lost hours o! capacity and$ as a result$ increase costs by about H1$"G*.
8. #y the same reasonin$ this would reduce costs by about H1$"G*.
4. &he shadow price !or capacity on the ,antera looms is -6.4-"5 per hour. Josin one loom !or the (uarter
results in 1*<15<"--"27"180 lost hours o! capacity and$ as a result$ increase costs by about H1$*05.
5. #y the same reasonin$ this would reduce costs by about H1$*05.
0. &he shawdow prices !or carpets 1$ 4$ 0 and 11 are the same as the marinal prices o! buyin these
products. &he allowable increase o! 1E;*6 indicate we can buy as much as we want at these prices.
G. &he company is payin H".88 per yard to !ill the order !or carpet " on the Voobie loom. However$ the
demand !or carpet " is H".458 per yard. &hus$ i! the company did not have to !ill the order !or carpet " it
could save not only the H".88 per yard cost o! carpet " but then be able to use the extra capacity on Vobbie
loom to !ill the remainin orders in a more e!!icient manner = savin an additional H6.1"8 on every yard
o! carpet " it doesn't have to make.
16. &he shadow price o! carpet 1- is the smallest at H1.-" per yard. So sellin more o! this carpet would
produce the hihest marinal pro!it !or the company.
11. Bes. )t's current cost is H".55 with an allowable increase o! H6.6""0". So a price increase to H".06 would
cause the optimal solution to chane.
1". 3o. )t's current cost is H1.4G with an allowable decrease o! H6.6-61. So a price decrease to H1.48 would
not cause the optimal solution to chane.

CHAP04 Sensitivity

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Chapter 4 - Sensitivity Analysis & The Simplex Method : S-1

-. See !ile+ ,rb-.-.xlsm

$E$10 -ad"1 #sed 40 300 40 6.666667 20

&otal :evenue 7 H""6$"G6

$E$11 Feed 3 8.5 0.000 3

18. See !ile+ ,rb-.18.xlsm

$C$6 A)out @lbs8 2a"s"s 0.75 0 0 1E+30 0.25

$C$10 7as<ets 75 0 2.5 1E+30 2.23607E-07

$E$6 2e1ula! $5.65 0.00 5.25 2.0$0$1E-08 2.0000001

$D$12 A'tual Bo'at"o 4 10 -11 10 1 1

&otal ?ost 7 H$611$46

$E$1$ +otal -,"..ed De>e! 12600 0 10080 2520 1E+30

c. H6. &here is a surplus o! cardboard already.

%ell &a'e (alue Price R,-, Side )ncrease *ecrease

% 6 -6.8 1."8 6 6 *.8 no

Case 4-2: -ar.et Sisters

$D$11 a 0 0 1.61 1E+30 0.0133342

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