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Sensitivityddddddd

The document describes an optimization problem faced by Zales Jewelers in determining how to allocate limited resources (rubies, sapphires, labor hours) to produce two types of rings to maximize profit. It provides the linear program formulation and optimal solution using 100 rubies, 120 sapphires and 70 labor hours. It then asks a series of questions about how changes to input parameters would impact the optimal solution and profit.

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Oğuz Kaan Çiçek
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© © All Rights Reserved
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567 views9 pages

Sensitivityddddddd

The document describes an optimization problem faced by Zales Jewelers in determining how to allocate limited resources (rubies, sapphires, labor hours) to produce two types of rings to maximize profit. It provides the linear program formulation and optimal solution using 100 rubies, 120 sapphires and 70 labor hours. It then asks a series of questions about how changes to input parameters would impact the optimal solution and profit.

Uploaded by

Oğuz Kaan Çiçek
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

1

Winston Chapter 5 Review, Page 226, Number 4 (Sensitivity Analysis)


Problem Statement: Zales Jewelers uses rubies and sapphires to produce two types of
rings. A type 1 ring requires 2 rubies, 3 sapphires, and 1 hour of jewelers labor. A type 2
ring requires 3 rubies, 2 sapphires, and 2 hours of jewelers labor. Each type 1 ring sells
for $400; type 2 sells for $500. All rings produced by Zales can be sold. At present,
Zales has 100 rubies, 120 sapphires, and 70 hours of jewelers labor. Extra rubies can be
purchased at a cost of $100 per ruby. Market demand requires that the company produce
at least 20 type 1 rings and at least 25 type 2. To maximize profit, Zales should solve the
following LP:
x1 = Number of Type 1 Rings Produced
x2 = Number of Type 2 Rings Produced
R = Number of Rubies Purchased
Max Z = 400x1 + 500x2 100R
s.t.
2x1 + 3x2 R 100 (Rubies)
3x1 + 2x2 120
(Sapphires)
x1 + 2x2 70
(Jewelers Labor)
x1 20
(Type 1 Rings, Demand)
x2 25
(Type 2 Rings, Demand)
x1, x2 0
(Positive Production)

Quant Input:
Free Format Model for 0226n04
>> Max
400X1+ 500X2-100R
>>Subject to
>> (1) 2X1+ 3X2-1R <= 100
>> (2) 3X1+ 2X2 <= 120
>> (3) 1X1+ 2X2 <= 70
>> (4) 1X1 >= 20
>> (5) 1X2 >= 25

Quant Output:
|------------------------------------------------------------------------------|
|
Summarized Report for 0226n04
Page : 1
|
|------------------------------------------------------------------------------|
|
|
|
|Opportunity| Objective | Minimum | Maximum |
|Number | Variable | Solution |
Cost
|Coefficient|Obj. Coeff.|Obj. Coeff.|
|-------+----------+-----------+-----------+-----------+-----------+-----------|
| 1
| X1
| +20.000000|
0| +400.00000| - Infinity| + Infinity|
| 2
| X2
| +25.000000|
0| +500.00000| - Infinity| + Infinity|
| 3
| R
| +15.000000|
0| -100.00000| - Infinity|
0|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19000 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

|------------------------------------------------------------------------------|
|
Summarized Report for 0226n04
Page : 2
|
|------------------------------------------------------------------------------|
|
|
|
|
Shadow | Slack or | Minimum | Maximum |
|Constr.| Status |
RHS
|
Price
| Surplus |
RHS
|
RHS
|
|-------+---------+------------+-----------+-----------+-----------+-----------|
| 1
| Tight | <+100.00000| +100.00000|
0| - Infinity| +115.00000|
| 2
| Loose | <+120.00000|
0| +10.000000| +110.00000| + Infinity|
| 3
| Tight | <+70.000000| +100.00000|
0| +60.000000| +70.000000|
| 4
| Tight | >+20.000000| +100.00000|
0| +20.000000| +25.000000|
| 5
| Tight | >+25.000000|
0|
0| +25.000000| + Infinity|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19000 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|
|----------------|
|Lindo Output
|
|For Shadow Price|
|----------------|
|
100.000000|
|
0.000000|
|
200.000000|
|
0.000000|
|
-200.000000|
|----------------|

Questions:
A. Suppose that instead of $100, each ruby costs $190. Would Zales still purchase
rubies? What would be the new optimal solution to the problem?
B. Suppose that Zales were only required to produce at least 23 type 2 rings. What
would Zales profit now be?
C. What is the most that Zales would be willing to pay for another hour of jewelers
labor?
D. What is the most that Zales would be willing to pay for another sapphire?
E. Draw a sensitivity graph to show the effect of changes in the price of each ruby on the
optimal profit.
F. Draw a sensitivity graph to show the effect of changes in the minimum demand level
for ring type 2 on the optimal profit.

Answers:
A. Since CBV = $190 is within the range of minimum and maximum objective
coefficients (negative infinity to zero), Zales would still purchase rubies because the
basic feasible solution would remain the same. As well, the basis of the solution
would remain the same. The new optimal solution to the problem would be Z = Z +
(CBV)XBV:
New optimal Z-value = 19000 + (-190 (-100))*(15) = 17650 or
New optimal Z-value = 400(20) + 500(25) 190(15) = 17650.
B. If Zales were only required to produce at least 23 type 2 rings (modifying the fifth
constraint), the minimum right-hand-side value would be less than 25 as seen, giving
a new basis, basic feasible solution, and optimal solution to the problem. In other

words, bb is out of range of the minimum and maximum right-hand-side values


meaning that the problem will need to be recalculated. For this specific problem,
Quant shows:
Free Format Model for 0226n04
>> Max
400X1+ 500X2-100R
>>Subject to
>> (1) 2X1+ 3X2-1R <= 100
>> (2) 3X1+ 2X2 <= 120
>> (3) 1X1+ 2X2 <= 70
>> (4) 1X1 >= 20
>> (5) 1X2 >= 23
|------------------------------------------------------------------------------|
|
Summarized Report for 0226n04
Page : 1
|
|------------------------------------------------------------------------------|
|
|
|
|Opportunity| Objective | Minimum | Maximum |
|Number | Variable | Solution |
Cost
|Coefficient|Obj. Coeff.|Obj. Coeff.|
|-------+----------+-----------+-----------+-----------+-----------+-----------|
| 1
| X1
| +24.000000| 0
| +400.00000| +300.00000| + Infinity|
| 2
| X2
| +23.000000| 0
| +500.00000| - Infinity| +700.00000|
| 3
| R
| +17.000000| 0
| -100.00000| -200.00000| 0
|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19400 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|
|------------------------------------------------------------------------------|
|
Summarized Report for 0226n04
Page : 2
|
|------------------------------------------------------------------------------|
|
|
|
|
Shadow | Slack or | Minimum | Maximum |
|Constr.| Status |
RHS
|
Price
| Surplus |
RHS
|
RHS
|
|-------+---------+------------+-----------+-----------+-----------+-----------|
| 1
| Tight | <+100.00000| +100.00000| 0
| - Infinity| +117.00000|
| 2
| Loose | <+120.00000| 0
| +2.0000000| +118.00000| + Infinity|
| 3
| Tight | <+70.000000| +200.00000| 0
| +66.000000| +70.666664|
| 4
| Loose | >+20.000000| 0
| +4.0000000| - Infinity| +24.000000|
| 5
| Tight | >+23.000000| -200.00000| 0
| +22.500000| +25.000000|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19400 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

New optimal Z-value = Z + SP5(b5) = 19000 + 200(25 23) = $19400 or


New optimal Z-value = 400(24) + 500(23) 100(17) = $19400.
By reducing the requirement to 23, the maximum profit has increased by $400!
C. The most additional that Zales would be willing to pay for another hour of jewelers
labor is $100, as seen by Quants output for shadow price (constraint number three).
Since the current pay is $25 per hour, Zales would be willing to pay up to $125 per
hour. However, when the number of jewelers hours is increased to 71, taking the
right-hand-side value outside of the limits given by Quant, the basis, basic feasible
solution, and Z-value will change requiring the problem to be recalculated.
D. The most that Zales would be willing to pay for another sapphire is $0 (constraint
number two). This is the case because this constraint has a slack value of 10 instead
of a shadow price greater than zero. In other words, there are 10 extra sapphires and
there is no need to purchase more. Additionally, constraint number two is nonbinding (bn), and one more sapphire would still keep the right-hand-side value within

the minimum and maximum limits, meaning that no changes in the basis, basic
feasible solution, or Z-value would occur.
E. The sensitivity graph to show the effect of changes in the price of each ruby on the
optimal profit is as follows (constraint number one, coefficient number three). The
results were obtained using Quant:
Rubies cost $0:
Input Data of The Problem 022604E1

Page: 1

Max +400.000X1
Subject to
(1) +2.00000X1
(2) +3.00000X1
(3) +1.00000X1
(4) +1.00000X1
(5) +0
X1

+500.000X2

+0

+3.00000X2
+2.00000X2
+2.00000X2
+0
X2
+1.00000X2

-1.00000R
+0
R
+0
R
+0
R
+0
R

<
<
<
>
>

+100.000
+120.000
+70.0000
+20.0000
+25.0000

|------------------------------------------------------------------------------|
|
Summarized Report for 022604EA
Page : 1
|
|------------------------------------------------------------------------------|
|
|
|
|Opportunity| Objective | Minimum | Maximum |
|Number | Variable | Solution |
Cost
|Coefficient|Obj. Coeff.|Obj. Coeff.|
|-------+----------+-----------+-----------+-----------+-----------+-----------|
| 1
| X1
| +20.000000|
0| +400.00000| - Infinity| + Infinity|
| 2
| X2
| +25.000000|
0| +500.00000| - Infinity| + Infinity|
| 3
| R
| +15.000000|
0|
0| - Infinity|
0|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 20500 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|
|------------------------------------------------------------------------------|
|
Summarized Report for 022604EA
Page : 2
|
|------------------------------------------------------------------------------|
|
|
|
|
Shadow | Slack or | Minimum | Maximum |
|Constr.| Status |
RHS
|
Price
| Surplus |
RHS
|
RHS
|
|-------+---------+------------+-----------+-----------+-----------+-----------|
| 1
| Tight | <+100.00000|
0|
0| - Infinity| +115.00000|
| 2
| Loose | <+120.00000|
0| +10.000000| +110.00000| + Infinity|
| 3
| Tight | <+70.000000| +250.00000|
0| +60.000000| +70.000000|
| 4
| Tight | >+20.000000| +150.00000|
0| +20.000000| +25.000000|
| 5
| Tight | >+25.000000|
0|
0| +25.000000| + Infinity|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 20500 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

Rubies cost $115:


Input Data of The Problem 022604eb
Max +400.000X1
Subject to
(1) +2.00000X1
(2) +3.00000X1
(3) +1.00000X1
(4) +1.00000X1
(5) +0
X1

+500.000X2

-115.000R

+3.00000X2
+2.00000X2
+2.00000X2
+0
X2
+1.00000X2

-1.00000R
+0
R
+0
R
+0
R
+0
R

Page: 1

<
<
<
>
>

+100.000
+120.000
+70.0000
+20.0000
+25.0000

|------------------------------------------------------------------------------|
|
Summarized Report for 022604eb
Page : 1
|
|------------------------------------------------------------------------------|
|
|
|
|Opportunity| Objective | Minimum | Maximum |
|Number | Variable | Solution |
Cost
|Coefficient|Obj. Coeff.|Obj. Coeff.|
|-------+----------+-----------+-----------+-----------+-----------+-----------|
| 1
| X1
| +20.000000| 0
| +400.00000| - Infinity| + Infinity|
| 2
| X2
| +25.000000| 0
| +500.00000| - Infinity| + Infinity|
| 3
| R
| +15.000000| 0
| -115.00000| - Infinity| 0
|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 18775 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|
|------------------------------------------------------------------------------|
|
Summarized Report for 022604eb
Page : 2
|
|------------------------------------------------------------------------------|
|
|
|
|
Shadow | Slack or | Minimum | Maximum |
|Constr.| Status |
RHS
|
Price
| Surplus |
RHS
|
RHS
|
|-------+---------+------------+-----------+-----------+-----------+-----------|
| 1
| Tight | <+100.00000| +115.00000| 0
| - Infinity| +115.00000|
| 2
| Loose | <+120.00000| 0
| +10.000000| +110.00000| + Infinity|
| 3
| Tight | <+70.000000| +77.500000| 0
| +60.000000| +70.000000|
| 4
| Tight | >+20.000000| +92.500000| 0
| +20.000000| +25.000000|
| 5
| Tight | >+25.000000| 0
| 0
| +25.000000| + Infinity|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 18775 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

Rubies cost $150:


Input Data of The Problem 022604ec
Max +400.000X1
Subject to
(1) +2.00000X1
(2) +3.00000X1
(3) +1.00000X1
(4) +1.00000X1
(5) +0
X1

+500.000X2

-150.000R

+3.00000X2
+2.00000X2
+2.00000X2
+0
X2
+1.00000X2

-1.00000R
+0
R
+0
R
+0
R
+0
R

Page: 1

<
<
<
>
>

+100.000
+120.000
+70.0000
+20.0000
+25.0000

|------------------------------------------------------------------------------|
|
Summarized Report for 022604ec
Page : 1
|
|------------------------------------------------------------------------------|
|
|
|
|Opportunity| Objective | Minimum | Maximum |
|Number | Variable | Solution |
Cost
|Coefficient|Obj. Coeff.|Obj. Coeff.|
|-------+----------+-----------+-----------+-----------+-----------+-----------|
| 1
| X1
| +20.000000| 0
| +400.00000| - Infinity| + Infinity|
| 2
| X2
| +25.000000| 0
| +500.00000| - Infinity| + Infinity|
| 3
| R
| +15.000000| 0
| -150.00000| - Infinity| 0
|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 18250 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|
|------------------------------------------------------------------------------|
|
Summarized Report for 022604ec
Page : 2
|
|------------------------------------------------------------------------------|
|
|
|
|
Shadow | Slack or | Minimum | Maximum |
|Constr.| Status |
RHS
|
Price
| Surplus |
RHS
|
RHS
|
|-------+---------+------------+-----------+-----------+-----------+-----------|
| 1
| Tight | <+100.00000| +150.00000| 0
| - Infinity| +115.00000|
| 2
| Loose | <+120.00000| 0
| +10.000000| +110.00000| + Infinity|
| 3
| Tight | <+70.000000| +25.000000| 0
| +60.000000| +70.000000|
| 4
| Tight | >+20.000000| +75.000000| 0
| +20.000000| +25.000000|
| 5
| Tight | >+25.000000| 0
| 0
| +25.000000| + Infinity|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 18250 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

Cost of Rubies Sensitivity Analysis Summary and Graph:


C1, $:
Z, $:

0*
20500

115*
18775

150
18250

Sensitivity Graph

Z, Objective Function

21000
20500
20000
19500
19000
18500
18000
0

20

40

60

80

100

120

140

160

C1, Third Coefficient

The cost of each ruby, from zero to $115 gives a linear decrease in profit,
respectively. As the ruby cost continues from $115 and higher, profit decreases at
a slightly lesser rate.
F. The sensitivity graph to show the effect of changes in the minimum demand level for
ring type 2 on the optimal profit is as follows (constraint number five, coefficient
number two). The results were obtained using Quant:
Ring Type 2 Demand: Zero:
Input Data of The Problem 022604fa
Max +400.000X1
Subject to
(1) +2.00000X1
(2) +3.00000X1
(3) +1.00000X1
(4) +1.00000X1
(5) +0
X1

+500.000X2

-100.000R

+3.00000X2
+2.00000X2
+2.00000X2
+0
X2
+1.00000X2

-1.00000R
+0
R
+0
R
+0
R
+0
R

Page: 1

<
<
<
>
>

+100.000
+120.000
+70.0000
+20.0000
+0

|------------------------------------------------------------------------------|
|
Summarized Report for 022604fa
Page : 1
|
|------------------------------------------------------------------------------|
|
|
|
|Opportunity| Objective | Minimum | Maximum |
|Number | Variable | Solution |
Cost
|Coefficient|Obj. Coeff.|Obj. Coeff.|
|-------+----------+-----------+-----------+-----------+-----------+-----------|
| 1
| X1
| +25.000000| 0
| +400.00000| +300.00000| +500.00000|
| 2
| X2
| +22.500000| 0
| +500.00000| +433.33334| +700.00000|
| 3
| R
| +17.500000| 0
| -100.00000| -140.00000| 0
|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19500 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|
|------------------------------------------------------------------------------|
|
Summarized Report for 022604fa
Page : 2
|
|------------------------------------------------------------------------------|
|
|
|
|
Shadow | Slack or | Minimum | Maximum |
|Constr.| Status |
RHS
|
Price
| Surplus |
RHS
|
RHS
|
|-------+---------+------------+-----------+-----------+-----------+-----------|
| 1
| Tight | <+100.00000| +100.00000| 0
| - Infinity| +117.50000|
| 2
| Tight | <+120.00000| +50.000000| 0
| +110.00000| +210.00000|
| 3
| Tight | <+70.000000| +50.000000| 0
| +56.000000| +80.000000|
| 4
| Loose | >+20.000000| 0
| +5.0000000| - Infinity| +25.000000|
| 5
| Loose | >0
| 0
| +22.500000| - Infinity| +22.500000|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19500 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

Ring Type 2 Demand: 22.5


Input Data of The Problem 022604fb
Max +400.000X1
Subject to
(1) +2.00000X1
(2) +3.00000X1
(3) +1.00000X1
(4) +1.00000X1
(5) +0
X1

+500.000X2

-100.000R

+3.00000X2
+2.00000X2
+2.00000X2
+0
X2
+1.00000X2

-1.00000R
+0
R
+0
R
+0
R
+0
R

Page: 1

<
<
<
>
>

+100.000
+120.000
+70.0000
+20.0000
+22.5000

|------------------------------------------------------------------------------|
|
Summarized Report for 022604fb
Page : 1
|
|------------------------------------------------------------------------------|
|
|
|
|Opportunity| Objective | Minimum | Maximum |
|Number | Variable | Solution |
Cost
|Coefficient|Obj. Coeff.|Obj. Coeff.|
|-------+----------+-----------+-----------+-----------+-----------+-----------|
| 1
| X1
| +25.000000| 0
| +400.00000| +300.00000| +500.00000|
| 2
| X2
| +22.500000| 0
| +500.00000| +433.33334| +700.00000|
| 3
| R
| +17.500000| 0
| -100.00000| -140.00000| 0
|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19500 Iteration = 5 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

|------------------------------------------------------------------------------|
|
Summarized Report for 022604fb
Page : 2
|
|------------------------------------------------------------------------------|
|
|
|
|
Shadow | Slack or | Minimum | Maximum |
|Constr.| Status |
RHS
|
Price
| Surplus |
RHS
|
RHS
|
|-------+---------+------------+-----------+-----------+-----------+-----------|
| 1
| Tight | <+100.00000| +100.00000| 0
| - Infinity| +117.50000|
| 2
| Tight | <+120.00000| +50.000000| 0
| +110.00000| +120.00000|
| 3
| Tight | <+70.000000| +50.000000| 0
| +70.000000| +80.000000|
| 4
| Loose | >+20.000000| 0
| +5.0000000| - Infinity| +25.000000|
| 5
| Tight | >+22.500000| 0
| 0
| - Infinity| +22.500000|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19500 Iteration = 5 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

Ring Type 2 Demand: 25


Input Data of The Problem 022504fc
Max +400.000X1
Subject to
(1) +2.00000X1
(2) +3.00000X1
(3) +1.00000X1
(4) +1.00000X1
(5) +0
X1

+500.000X2

-100.000R

+3.00000X2
+2.00000X2
+2.00000X2
+0
X2
+1.00000X2

-1.00000R
+0
R
+0
R
+0
R
+0
R

Page: 1

<
<
<
>
>

+100.000
+120.000
+70.0000
+20.0000
+25.0000

|------------------------------------------------------------------------------|
|
Summarized Report for 022504fc
Page : 1
|
|------------------------------------------------------------------------------|
|
|
|
|Opportunity| Objective | Minimum | Maximum |
|Number | Variable | Solution |
Cost
|Coefficient|Obj. Coeff.|Obj. Coeff.|
|-------+----------+-----------+-----------+-----------+-----------+-----------|
| 1
| X1
| +20.000000| 0
| +400.00000| - Infinity| + Infinity|
| 2
| X2
| +25.000000| 0
| +500.00000| - Infinity| + Infinity|
| 3
| R
| +15.000000| 0
| -100.00000| - Infinity| 0
|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19000 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|
|------------------------------------------------------------------------------|
|
Summarized Report for 022504fc
Page : 2
|
|------------------------------------------------------------------------------|
|
|
|
|
Shadow | Slack or | Minimum | Maximum |
|Constr.| Status |
RHS
|
Price
| Surplus |
RHS
|
RHS
|
|-------+---------+------------+-----------+-----------+-----------+-----------|
| 1
| Tight | <+100.00000| +100.00000| 0
| - Infinity| +115.00000|
| 2
| Loose | <+120.00000| 0
| +10.000000| +110.00000| + Infinity|
| 3
| Tight | <+70.000000| +100.00000| 0
| +60.000000| +70.000000|
| 4
| Tight | >+20.000000| +100.00000| 0
| +20.000000| +25.000000|
| 5
| Tight | >+25.000000| 0
| 0
| +25.000000| + Infinity|
|------------------------------------------------------------------------------|
|
Maximized OBJ = 19000 Iteration = 4 Elapsed CPU second = 0
|
|------------------------------------------------------------------------------|

Ring Type 2 Demand Sensitivity Analysis Summary and Graph:


b5, rings:
Z, $:

0*
19500

22.5*
19500

Sensitivity Graph

NOTE:
Infeasible
solution
above 25
rubies!

19600
Z, Objective Function

25*
19000

19500
19400
19300
19200
19100
19000
18900
0

10

15

20

25

30

b5, Second RHS

This sensitivity graph shows that the minimum demand level for ring type 2 can be any
value between zero and 22.5 and still have the same profit of $19,500. Once above 22.5,
profit starts to drop drastically, until an infeasible solution is reached above 25 rings.

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