Parker's Class

Flair Furniture example

When you go into QM for windows, the software the comes with the book, and run a job you then have the
ability to view output in several forms. You do that by hitting the Window button on the main tool bar. You then
see five options for output. Below I have the output from each section, but in the following order: Graph,
Results, Solution list, Iterations and Ranging. Let's look at each part and note some useful information. The
problem we use here is the Flair Furniture problem . The problem is to Maximize profit 7(tables) + 5(chairs)
Subject to 4(tables) + 3(chairs) is less than or equal to 240 (the carpentry constraint),
2(tables) + 1(chair) is less than 100 (the painting constraint).
Below, in addition to finding the solution values to a problem, we will look at two types of sensitivity analysis;
1) how does the optimal solution change (in terms of table and chairs made) if we change a coefficient in the
objective function(like the 7 or the 5 above), and
2) how does the value of the objective function (profit here) change if we could add to the right hand value of a
constraint (like the 240 or the 100 above).
The Graph has output shown below. Note the graph of the constraints and how the feasible region is
colored in. The table lists the corner points.
Z in this table means that total profit for each row combination of table and chairs produced. In this example the
interior corner, or the place where the constraints cross, is the optimal solution. Since we only have two
constraints, this means all the resouorces have been used up in making 30 tables and 40 chairs.
CornerPoints
Tables Chairs Z
0 0 0.
0 80 400.
50 0 350.
30 40 410.
Created by QM for Windows
The Results section of the output gives the solution to the problem.
Note we have a solution of 30 tables and 40 chairs and profit of 410.
A new piece of information for us here is under the column Dual. This is part of information desired in the
sensitivity analysis.
In the carpentry row we see the dual value is 1.5. Remember that we used up all the carpentry time of 240
hours. The 1.5 means that if we had one more hour of carpentry time we could add 1.5 to the value of the
objective function. So we could add $1.5 to profit.
The 1.5 is called a shadow price.
The shadow price for the painting department is 0.50. Adding an hour to the painting department would increase
profit by 50 cents.
Fl ai r Furni ture Sol uti on
Tabl es Chai rs RHS Dual
Maxi mi ze 7. 5.
Carpentry 4. 3. <= 240. 1.5
Pai nti ng 2. 1. <= 100. 0.5
Sol uti on-> 30. 40. 410.
Created by QM for Windows
If a dual value, or shadow price, is zero that would indicate the constraint is not binding - we have not used all
we could have in that constraint. So it would not add anything to our objective if we added to the constraint.
The Solution list section has some terminology we need to learn. If you think about our solution we
make some of both tables and chairs. So tables and chairs have nonzero solution values. In this example tables
and chairs are said to be "basic" variables because their values are nonzero. In this example the slack variables
are "nonbasic." The terminology is formal and used in describing the simplex method.
Fl ai r Furni ture Sol uti on
Vari abl e Status Val ue
Tabl es Basi c 30.
Chai rs Basi c 40.
sl ack 1 NONBasi c 0.
sl ack 2 NONBasi c 0.
Opti mal Val ue (Z) 410.
Created by QM for Windows
The Iterations section lists the steps of analysis in the Simplex Method(for our work here I do not find this
section to be that useful). In the Flair furniture problem it took 3 iterations to find the optimal solution.
The first iteration starts with slack variables as "basic" soltions. This corresponds to starting at the origin in the
graph.
The second iteration brings in tables, but we know the solution is not optimal because the cj - zj row has a
positive value in it.
The third, and final here, iteration shows the solution again under the quantity column. Note under the slack
columns, in the zj row we again see the shadow prices. Remeber these are the contributions to profit of having
one more unit of the resources. We could get more information out of this table but it is easier to see in the next
section.
Fl ai r Furni ture Sol uti on
Cj Basi c Vari abl es 7 Tabl es 5 Chai rs 0 sl ack 1 0 sl ack 2 Quanti ty
Iterati on 1
0 sl ack 1 4. 3. 1. 0. 240.
0 sl ack 2 2. 1. 0. 1. 100.
zj 0. 0. 0. 0. 0.
cj -zj 7. 5. 0. 0.
Iterati on 2
0 sl ack 1 0. 1. 1. -2. 40.
7 Tabl es 1. 0.5 0. 0.5 50.
zj 7. 3.5 0. 3.5 350.
cj -zj 0. 1.5 0. -3.5
Iterati on 3
5 Chai rs 0. 1. 1. -2. 40.
7 Tabl es 1. 0. -0.5 1.5 30.
zj 7. 5. 1.5 0.5 410.
cj -zj 0. 0. -1.5 -0.5
Created by QM for Windows
The Ranging section provides more sensitivity analysis information. Notice the solution again for the table
and chairs.
The lower and upper bounds for the table and chairs is the range of values the original profit contributions can
change and still not change the solution to the problem. You want to look at these one at a time. So the profit of
tables can range between 6.67 and 10 and not change the optimal solution of 30 tables and 40 chairs (the profit
value probably changes though).
In the constraint rows we see the dual or shadow price column again. Again, this is the profit contribution of
adding one unit to the resource constraints.
The upper and lower bound indicates the range of values for the resource constraints such that the shadow price
would still hold. Thus if we go outside the upper and lower bound the shadow price shown is no longer valid.
Fl ai r Furni ture Sol uti on

Vari abl e Val ue Reduced Cost Ori gi nal Val Lower Bound Upper Bound
Tabl es 30. 0. 7. 6.67 10.
Chai rs 40. 0. 5. 3.5 5.25
Constrai nt Dual Val ue Sl ack/Surpl us Ori gi nal Val Lower Bound Upper Bound
Carpentry 1.5 0. 240. 200. 300.
Pai nti ng 0.5 0. 100. 80. 120.
Created by QM for Windows
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