1.

A
Maximize
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Solution->

M101
M102
3000
5000
1
2
2
2
2
0
0
3
2000
1000

Maximize
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Solution->

M101
M102
3000
5000
1
2
2
2
2
0
0
3
1999
1001

1.b

RHS
<=
<=
<=
<=

4000
6000
5000
4500
11000000

RHS
<=
<=
<=
<=

4001
6000
5000
4500
11002000

Extra unit of capacity is worth 2000 (dual price)

1.c
Maximize
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Solution->

M101
M102
3000
5000
1
2
2
2
2
0
0
3
1900
1100

RHS
<=
<=
<=
<=

4100
6000
5000
4500
11200000

Hence 100 times

1.D

Variable
M101
M102
Constraint
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly

Value
Reduced Cost
Original ValLower Bound
2000
0
3000
2500
1000
0
5000
3000
Dual Value Slack/Surplus
Original ValLower Bound
2000
0
4000
3500
500
0
6000
5000
0
1000
5000
4000
0
1500
4500
3000

Upper Bound of 4500 indicates that the value will not change for the next 500 units
>> 500 units can be added

Dual
2000
500
0
0

Dual
2000
500
0
0

Dual
2000
500
0
0

Upper Bound
5000
6000
Upper Bound
4500
6500
Infinity
Infinity

Question 2
Sourcing out engine assembly is acceptable from 1 (b), and the largest rent Merton can pay is $2000 and no more than 500 h

is $2000 and no more than 500 hours of engine assembly can be purchased.

Maximize
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Solution->

M101
M102
M103
3000
5000
2000
1
2
0.8 <=
2
2
1.5 <=
2
0
1 <=
0
3
0 <=
2000
1000
0

RHS

Dual

4000
6000
5000
4500
11000000

2000
500
0
0

No. The optimal mix does not include model 103s and hence no it should not be included.

Engine Assembly
Metal Stamping
Model 101 Assembly

0.8
1.5
1

2000
500
0

1600
750
0
2350 << Minimum contribution required

M101
M102
M103
3000
5000
2350
1
2
0.8 <=
2
2
1.5 <=
2
0
1 <=
0
3
0 <=
2000
1000
0

RHS

Maximize
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Solution->

RHS

Maximize
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Solution->

M101
M102
M103
3000
5000
2351
1
2
0.8 <=
2
2
1.5 <=
2
0
1 <=
0
3
0 <=
0 857.1428 2857.143

Dual

4000
6000
5000
4500
11000000

2000
500
0
0

Dual

4000 1998.571
6000 501.4286
5000
0
4500
0
11002860

M101
M102
OT101
OT102
39000
38000
39000
38000

Revenue
VC:
DM
24000
DL
4000
OH
8000
Contribution Margin
3000

20000
4500
8500
5000

24000
4600
8000
2400

20000
5700
8500
3800

The optimal solution yields a contribution of $11.7 million with 1500 model 101 trucks and 1250 mode

M101
M102
OT101
OT102
Maximize
3000
5000
2400
3800
Engine Assembly
1
2
0
0
Engine Assembly OT 0
0
1
2
Metal Stamping
2
2
2
2
Model 101 Assembly2
0
2
0
Model 102 Assembly0
3
0
3
Solution->
1500
1250
0
250

RHS
<=
<=
<=
<=
<=

4000
2000
6000
5000
4500
11700000

model 101 trucks and 1250 model 102s produced in regular time and 250 model 102s produced in over time. Hence paying a monthly fix

Dual
600
0
1200
0
466.6667

time. Hence paying a monthly fixed overhead of $.75 million is not worth the increase of $.7 million.

Maximize
Engine Assembly
Metal Stamping
Model 101 Assembly
Model 102 Assembly
Sales Mix
Solution->

M101
M102
3000
5000
1
2
2
2
2
0
0
3
1
-3
2250
750

RHS
<=
<=
<=
<=
>=

4000
6000
5000
4500
0
10500000

Dual
0
1750
0
0
-500