Microsoft Excel 16.

0 Sensitivity Report
Worksheet: [assesment22.xlsx]Problem 2
Report Created: 7/29/2020 4:22:02 PM

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$C$13 Gallons produses Chocolate 0 -0.0375 1 0.0375 1E+030
$D$13 Gallons produses Vanilla 300 0 0.9 0.05 0.0125
$E$13 Gallons produses Banana 75 0 0.95 0.0214285714 0.05

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$F$8 Milk Used 180 0 200 1E+030 20
$F$9 Sugar Used 150 1.875 150 10 30
$F$10 Cream Used 60 1 60 15 3.75
Problem 2: (20 points) Solve problem 8 of Chapter 5

Chocolate Vanilla Banana

Profit $ 1.00 $ 0.90 $ 0.95

Resource Resourses Used per Gallon Produced Used

Milk 0.45 0.5 0.4 180
Sugar 0.5 0.4 0.4 150
Cream 0.1 0.15 0.2 60

Chocolate Vanilla Banana

Gallons produses 0 300 75
Optimal solution

A) What is the optimal solution and total profit?

Optimal solution Chocolate Vanilla Banana

0 300 75

Total profit = 0*Chocolate+300*Vanilla+75*Banana

Total profit = 0*1+300*$0.9+75*$0.95 = 341,25 = 0 + 270+71.25 = $341.25

B) Suppose the profit per gallon of banana changes to $1.00. Will the optimal solution change and what can b
effect on total profit?

According to the sensitivity report, the allowable banana increase is 0.0214, so up to $0.95+$0.0214 = $0.9714 i
an increase in profit per gallon of banana from $0.95 to $0.9714 will not affect the optimal solution. But changin
gallon of banana more than $0.9714 will change the optimal solution and affect the total profit. In our case, $1.
the optimal solution will be changed, and profit will increase by $ 8.75 (see below).ed.

Optimal solution changes

Profit per gallon of
banana Chocolate Vanilla Banana
$ 0.95 0 300 75
$ 1.00 100 0 250

The optimal solution will change and profit will increase.

C) Suppose the profit per gallon of banana changes to $0.92. Will the optimal solution change and what can b
effect on total profit?

According to the sensitivity report, our allowable decrease is 0.05, so up to 0.95-0.05 = 0.9 in $. So a decrease in
gallon of banana up to $0.9 will not affect the optimal solution. In our case 0.92 > 0.9, so optimal solution will n
But changing profit per gallon of banana will affect the total profit( please see below).
 Optimal solution wiil not change
Profit per gallon of
banana Chocolate Vanilla Banana
$ 0.95 0 300 75
$ 0.92 0 300 75

The optimal solution will not change, but the total profit will change.

D) Suppose the company discovers that tree gallons of cream have gone sour and so must be thrown out. Wil
solution change and what can be said about the effect on total profit?

If we should throw out 3 gallons of cream, so we need to decrease constraint RHS for cream. As sensitivity repo
constraint for cream is 60, and allowable decrease is 3.75, and as the change is within the allowable range, it m
is valid. The optimal solution will change, and the total profit will decrease by $3.

Change in profit = cream amount of change (57-60=- 3) X shadow price(1) = -3 X$ 1 = - $3

The optimal solution will change, and the total profit will decrease .

E) Suppose the company has the opportunity to buy an additional 15 pounds of sugar at a total cost of $15. Sh
Explain

In this case, we should increase the sugar by 15 pounds. As sensitivity report shows for allowable sugar increase
means that sugar change will affect on profit up to 10 pounds change. More than 10 pounds increase in sugar w
profit any more.
So if we need to increase the sugar by 15 pounds, we will have
10 (max allowable increase ) X 1.875 (shadow price) = $18.75
As total total cost of sugar is $15
We will generate gain $18.75 - $ 15 = $3.75

According to this, it is profitable to do, as we will have $ 3.75 gain.

F) Fill in all the sensitivity report information for the milk constraints, given just the optimal solution for the p
how you were able to deduce each number

Constraints
Final Shadow Constraint
Name Value Price R.H. Side
Used Available
Milk Used 180 0 200
The final value is equal to used milk, so it is 180. The constraint is equal to available milk, so it is 200. The all
decrease is the difference of available and used milk, and the allowable increase is infinite, as, after 200 incre
will not affect on profit. The shadow price tells us how much the optimal solution can be increased or decreas
resources available with one unit. As in our case, we have more milk than use it, so that unused amount we w
price.0. All
 constr Available
<= 200
<= 150
<= 60

341.250
Total profit

al solution change and what can be said about the

so up to $0.95+$0.0214 = $0.9714 increase in $. So

ct the optimal solution. But changing profit per
ect the total profit. In our case, $1.00> 0.9714, so
elow).ed.

Total cost
341.25
after change 350.00 increase by $8.75

al solution change and what can be said about the

.95-0.05 = 0.9 in $. So a decrease in profit per

.92 > 0.9, so optimal solution will not be changed.
e below).
 Total cost
341.25
after change 339.00 decrease by $2.25.

ur and so must be thrown out. Will the optimal

t RHS for cream. As sensitivity report shows

e is within the allowable range, it means the change
y $3.

-3 X$ 1 = - $3 Total cost
341.25

after change 338.25 decreaseby $3

ds of sugar at a total cost of $15. Should it do so??

shows for allowable sugar increase is 10, so it

than 10 pounds increase in sugar will not change

just the optimal solution for the problem. Explain

Allowable Allowable
Increase Decrease
Avaliable - used
1E+030 20
o available milk, so it is 200. The allowable
rease is infinite, as, after 200 increase of milk, it
lution can be increased or decreased if we change
se it, so that unused amount we will have $0