ABC Automobiles

Answer-3

According to the new overtime values, new objective function and new constraints are formulated as follows :

Objective Function
Max Z = 2400 X3 + 3800X4 - 9.35 Millions USD

Constraints
X3 + 2X4 <= 6000
2X3 + 2X4 <= 6000
2X3 <= 5000
3X4 <= 4500
X3, X4 >= 0

Finding Optimal Solution using Simplex in Excel

Decision Variables X3 X4
Solution 1500 1500
Co-efficient 2400 3800

Objective Function
Maximize 9300000

subject to
Constraints coefficient coefficient of X4 Inequality RHS
of X3
Constraint 1 1 2 <= 6000
Constraint 2 2 2 <= 6000
Constraint 3 2 0 <= 5000
Constraint 4 0 3 <= 4500

Profit = 2400X3+3800X4-9.35 Millions USD = 9300000- 9350000 = - 5000 USD

We are making Negative profit by producing overtime. Hence, it is not advisable to go for overtime production
2000
1000
Microsoft Excel 16.0 Answer Report
Worksheet: [3.xlsx]3
Report Created: 01-01-2023 21:35:51
Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
Solver Engine
Solver Options

Objective Cell (Max)

Cell Name Original Value Final Value
$B$25 Maximize 0 12000000

Variable Cells
Cell Name Original Value Final Value Integer
$C$21 Solution X3 0 1500 Contin
$D$21 Solution X4 0 1500 Contin

Constraints
Cell Name Cell Value Formula Status Slack
$L$29 <= 4500 $L$29<=$F$29 Not Binding 1500
$L$30 <= 6000 $L$30<=$F$30 Binding 0
$L$31 <= 3000 $L$31<=$F$31 Not Binding 2000
$L$32 <= 4500 $L$32<=$F$32 Binding 0
Microsoft Excel 16.0 Sensitivity Report
Worksheet: [3.xlsx]3
Report Created: 01-01-2023 21:35:51

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$C$21 Solution X3 1500 0 3000 2000 3000
$D$21 Solution X4 1500 0 5000 1E+030 2000

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$L$29 <= 4500 0 6000 1E+030 1500
$L$30 <= 6000 1500 6000 2000 3000
$L$31 <= 3000 0 5000 1E+030 2000
$L$32 <= 4500 666.66666667 4500 4500 3000