Post-optimal analysis, Operation Research

It can be seen from the optimal solution for the foundry problem that two resources, raw material-1 and labor, are exhausted whereas the other two resources, raw material-2 and foundry capacity, remain available. This implies that the availability of raw material-1 and labor are both exerting a restrictive effect on foundry operation and its profitability. Let us suppose, the foundry can buy the raw material-1 in the open market at a cost of Rs.15 per kg, then is it worth buying and increasing its production to make more profit? Similarly, if the foundry can hire extra labor for Rs.15 per day, then is it worth hiring the extra labor?

The above questions can be answered from the (Zj - Cj) values in the final tableau. The (Zj - Cj) value corresponding to variables S1, that is, column 6 is 20. This indicates that the profit can be increased by Rs.20 for a unit increase in the availability of raw material-1. Thus, if one kilogram of raw material-1 costs Rs.15, then by purchasing it and changing the product mix, the foundry can increase its profit by Rs.20 - Rs.15 = Rs.5. Similarly, the (Zj - Cj) value corresponding to the variable SL is 10 and this indicates that for a unit increase in the availability of labor, profit can be increased by Rs.10. Hence, it is worth hiring labor if its cost is less than Rs.10. Similarly, it is worth buying raw material-1 from open market, if its cost is less than Rs.20 per kg.

The information in the final tableau is also useful in studying the effects of the variations in the profit contributions on the product mix.

Posted Date: 9/13/2012 9:03:37 AM | Location : United States





what is post-optimality
Posted by endalk | Posted Date: 7/4/2013 1:07:39 PM


Related Discussions:- Post-optimal analysis, Assignment Help, Ask Question on Post-optimal analysis, Get Answer, Expert's Help, Post-optimal analysis Discussions

Write discussion on Post-optimal analysis
Your posts are moderated
Related Questions
Write a note on tracing a closed loop. What are the characteristic features of a closed loop?

Step 1: Research Towers of Hanoi problem The Towers of Hanoi is a problem frequently used to teach recursive programming techniques. Step 2: Run the assembly code from Hanoim

Pamphlets - classification of documents: A pamphlet is an independent publication. It is normally a document of a few printed pages, usually less than 49. Pamphlets cover an e

Ask question #Minimum 100 words acceptNas food produces to kinds of popular dark chocolate bars. the banana and coffee. the banana bar costs 0.22 to make and sells of 0.35, where a


These models are used when one must decide the optimal time to replace equipment for one reason or the other for instance, in the case of equipment whose efficiency dete

A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper i

The 2 nd phase of operations Research is to construct a mathematical model representing the system under study. It requires the identification of both static and dynam

Select five Operations Research techniques and describe in detail the real world application of such techniques in business decision making.

Government Documents: Government  publications are the official documents brought out at government expense. They are the records of activities of the (1) Executive, (2) Legis