How much would you need to change the price

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Reference no: EM13524011

Harkin Electronics is planning its production for the next quarter for its two product lines, relays and capacitors. The profit contribution is $250 for a case of relays and $200 for a case of capacitors. Three resources limit how much of each product the company can produce: labor, stamping capacity, and testing capacity. Next quarter 80,000 labor hours will be available; a case of relays requires 200 labor hours and a case of capacitors requires 150. The stamping machine will be available for 1,200 hours next quarter and a case of relays requires 4 hours on the stamping machine and a case of capacitors requires 2 hours. Relays require 3 hours of testing per case and capacitors require 5. The testing machine will be available for 2,000 hours next quarter. For every case of capa citors, the company can produce no more than two cases of relays. At a minimum the company must produce at least 150 cases of relays.

You must submit your linear programming formulations and show the linear programming software solution to this problem to receive credit. If you solved this using another linear programming approach, you may submit that instead of the software solution.

a) To maximize total profit next quarter, how many cases of relays and capacitors should Harkin Electronics produce during that period? If your answer is in fractional units of cases that is acceptable - do not round to whole number of cases.

b) How much profit will result? As a reminder, provide your linear programming formulation and the software solution to receive any credit for this problem.

c) Using your sensitivity analysis output, answer the following questions. You must indicate the source of your answers from the sensitivity analysis output.

. For which resources would it make sense to add additional capacity based on the company's objective? Why?
. If you excluded a resource, why did you exclude it?
. For those resources for which you would consider adding additional units, what is the range on the right-hand side values for the shadow prices to remain valid?
. How much would you need to change the price of the capacitor so that its value in the optimal solution changes from the current value or in other words when the current optimal solution is no longer valid? Explain.

d) Now suppose that there is a requirement that of the total labor hours used by Harkins, at least 60% must be hours used for producing relays. Write the constraint for this requirement. However, you do not need to resolve the problem.

Reference no: EM13524011

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