Optimization with Spreadsheets

Sensitivity Analysis Practice problems -2

Problem 1

(a) Solve the optimization problem and determine the optimal solution
(b) If the unit contribution of the deluxe bag increased by $1.5, would the solution
continue to be optimal?
(c) Management is planning to cross train labor to increase the flexibility of deploying
them to different departments. Would this plan be beneficial for the firm?
(d) Suppose that after we have solved the problem, we find a new supplier and can
purchase the leather required for these bags at a lower cost. Leather is an important
component of each of the three types of bags but is used in different amounts in
each type. After factoring in the new cost of leather, the profit margin per bag is
found to be $10.30 for a standard bag, $11.40 for a deluxe bag and $12.97 for a
lightweight bag. Does the current plan remain optimal?
(e) Suppose that after reviewing the solution, management states that they will not
consider any solution that does not include the production of some deluxe bags.
Management then decides to add the requirement that the number of deluxe bags
produced must be at least 30% of the number of standard bags produced. What is
the new optimal solution? If we relax the minimum 30% requirement by 1%, how
much would the profits increase?
Problem 2
Problem 3

Gulf Coast Electronics