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
Question : (a) (i) What do you understand by the term "operations research"? (ii) Discuss three common operations research models. (b) Self-service at the university c

if the year or age is given from 0 how to solve then?


In this method variables beings studied are controlled by the investigator. In other the effect of one variable is observed while other relevant variables are held constant

Determining Sample Size for estimatingMeans a. Acceptable Errors: There  may be several errors  in the  sample  size. The researcher  will have  to decide those  errors. Whic

explain the procedure of MODI method of finding solution through optimaly test.

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

Research Paper Overview Research Topic: •    Research the effects of federal mandates in your state.  Examples include the Americans with Disabilities Act, the No Child Left B

#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

Example 2 Max Z = 3x 1 - x 2 Subject to             2x 1 + x 2 ≥ 2             x 1 + 3x 2 ≤ 3             x 2 ≤ 4     &     x 1 ≥ 0, x 2  ≥ 0   A