Anderson Electronics is considering the production of four potential products: VCRs, Stereos, TVs and

DVD players. It is assumed that the input for all the products can be viewed in terms of just three
resources’: electronic components, non-electronic components and assembly time the composition of
the four products in terms of these three inputs, maximum supply required and selling price per unit of
the products is shown in the table given below:

VCR Stereo TV DVD Player Maximum

Supply
Electronic 3 4 4 3 4700
component
Non-electronic 2 2 4 3 4500
component
Assembly time 1 1 3 2 2500
(hrs)
Selling price (per 70 80 150 110
unit)

Electronic component can be obtained at Rs. 7 per unit; non-electronic components can be obtained at
Rs. 5 per unit and assembly time costs Rs. 10 per hour. Each resource is available in limited quantity.
Formulate and solve for profit maximization. Further,

a) What is the impact on profit of a change in the supply of non-electronic components?

ANS)
b) What is the impact on profit if we could increase the supply of electronic components by 400
units?
ANS) If the amt of change lies within the limit than there will be change of 800Rs. If inc. RHS,
which makes it less restrictive which is better, i.e. Max
c) What would happen if we force the productions of VCRs?
ANS) If we forcefully try to make any non zero variable, zero, then the profit will be reduced by
1rs per unit.
d) If Anderson increase profit on stereo up to Rs 40, what would be the impact on current optimal
production plan?
e) Assume that we have an opportunity to get 250 additional hours of assembly time. However,
this time it will cost us Rs. 15 per hour. Should we take it?