Post-optimal analysis, Operation Research

Assignment Help:

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.


Related Discussions:- Post-optimal analysis

Decision Analysis, make a research project for modern day companies on how...

make a research project for modern day companies on how they can make decisions using decision analysis

Production systems, How can you integrate environmental concerns into produ...

How can you integrate environmental concerns into production systems?

Tables and graphs, Normal 0 false false false EN-IN ...

Normal 0 false false false EN-IN X-NONE X-NONE

Linear Programming Problem, A paper mill produces two grades of paper viz.,...

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

Linear programming, maximize z=3x1+2x2 subgect to the constraints x1+x2 x1-...

maximize z=3x1+2x2 subgect to the constraints x1+x2 x1-x2 x1,x2>_0

A paper mill produces, . A paper mill produces two grades of paper viz., X ...

. 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

Answer, A paper mill products two grade of paper viz., X & Y. Because of ra...

A paper mill products two grade of paper viz., X & Y. Because of raw material restriction, it cannot produce more than 400 tons of grade X paper & 300 tons of grade Y paper in a we

Preparation of script - report writing presentation , Preparation of Script...

Preparation of Script   The most  tedious  and arduous takes is  the  preparation of the  script. While  you have  all the ideas and  points  will should  stored  up in the  mi

OR, what is operation research an management decision making

what is operation research an management decision making

endalk

7/4/2013 1:07:39 PM

what is post-optimality

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd