Question 5 • Sensitivity Analysis — The Almost Natural Baked Goods Company (ANBGCo)

makes four products: mini-cakes, muffins, mini-pies, and fruit-crunches which are cellophane
wrapped and shipped to convenience stores all over British Columbia. These are the decision
variables — their unit of measure is a gross (i.e., 144 units/gross; a dozen dozens). ANBGCo’s
objective is to maximize profit — so the coefficients are in $/gross.

They are time constrained on their two key processes: mix & fill, and baking.
They are resource constrained on the two main ingredients: Fruit Filling and Premix Pastry.
Rather than write out the full linear program — I trust you can discern what is going on from
this pre-Solver screen grab from the ANBGCo industrial engineer’s Excel spreadsheet:

That last constraint — the “Ratio Constraint”? Historically, sales have been such that the mini-
cakes & muffins have been great sellers, but ANBG Co. doesn’t want to cannibalize sales of the
other products (and potentially lose valuable shelf space) so they’ve set a cap: the ratio of these
two products to the entire product line must be ≤ 60%, i.e.: X1 + X2 ≤ 0.60(X1 + X2 + X3 + X4).

After running Solver, the Answer Report showed:

Use the space below for calculations and “rough work” for the questions on the next page. This
section will not be graded…

BUSN 6250 | DASC 6210 • Final Exam • Fall Term 2022 • Page 8 of 16
Question #5 — continued… fill in the missing values from the Sensitivity Report: (1 mark each)

[A] [B] [C] [D]

[E] [F] [G] [H]

è Decision Time! (1 mark each; indicate YES or NO and WHY)

[I] General Amalgamated Foodstuffs, Inc., the company that manufacturers the Fruit Filling
Compound has offered ANBGCo an additional 200 pounds (at 50¢ / lb.) of this key ingredient.
Should Almost Natural purchase this additional Fruit Filling Compound? Why or why not?

[J] Uh oh. Two 50 lb. bags of Premix Pastry Compound were sitting on a wet floor and are
spoiled; they can no longer be used to make ANBGCo products. What is the impact of this to
the company? That is, will there be an impact to the OFV (why / why not), and if so, what will
that impact be?

Q5A

/10

BUSN 6250 | DASC 6210 • Final Exam • Fall Term 2022 • Page 9 of 16
Question #5 — continued… more management questions. Here is the Sensitivity Report again:

For each of the following questions clearly whether or not the problem must be re-solved using
Excel and provide an explanation -OR- indicate that there is no need to re-solve the problem
and show your work on how to get the new objective function value (OFVnew)

For example — “Suppose the profit per gross of Muffins drops by $2; what is the impact?”

[ ] No need to re-solve the problem;

[ X ] The problem must be re-solved in Excel
The new OFV is:
Explanation: Calculation:
A $2 decrease is outside the
allowable limit of $1.64

[K] Suppose ANBG Company’s management decides it would be better to manage their
operation by minimizing overall costs vs maximizing overall profit. What impact does this
decision have on the optimal solution and the objective function value (OFV)?

[ ] No need to re-solve the problem;

[ ] The problem must be re-solved in Excel
The new OFV is:
Explanation: Calculation:

BUSN 6250 | DASC 6210 • Final Exam • Fall Term 2022 • Page 10 of 16
[L] The director of HR at ANBG Co. has negotiated with the unionized staff in the Mix & Fill
Process area. They are willing to collectively put in 10% (i.e., 60) more hours. What’s the impact
for the company?

[ ] No need to re-solve the problem;

[ ] The problem must be re-solved in Excel
The new OFV is:
Explanation: Calculation:

[M] Management receives a big order from Late Night Munchies. They require mini-cakes and
muffins (any combination) that makes up at least 60 gross total. What’s the impact?

[ ] No need to re-solve the problem;

[ ] The problem must be re-solved in Excel
The new OFV is:
Explanation: Calculation:

[N] Marketing wants a price hike for Muffins to keep up with the competition. If the profit goes
up to 56$/gross, what is the impact?

[ ] No need to re-solve the problem;

[ ] The problem must be re-solved in Excel
The new OFV is:
Explanation: Calculation:

[O] An Industrial Engineer was hired to find some efficiencies on the Muffin product line,
namely reducing Mix & Fill times from 3.5 hours down to 3.0 hours. This must be good news!
What is the impact?

[ ] No need to re-solve the problem;

[ ] The problem must be re-solved in Excel
The new OFV is:
Explanation: Calculation:

Q5B / 10

BUSN 6250 | DASC 6210 • Final Exam • Fall Term 2022 • Page 11 of 16