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Winco sells four types of products. The resources needed to produce one unit of each and the sales prices are given in the following
table: Resource Product1 Product 2 Product 3 Product 4
Raw material 2 3 4 7
Hours of labor 3 4 5 6
Sales price ($) 4 6 7 8
Currently 4600 units of raw material and 5000 labor hours are available. To meet customer demands, exactly 950 total units must be produced. Customers also demand that at least 400 units of product 4 be produced.
Do the sensitivity analysis . DON’T solve a new LP by changing the parameters to answer the questions. However, you can double check your answers by resolving the new LPs (not required). For each of the following changes, answer the following three questions: 1) Does the basis remain optimal or is no longer optimal? 2) Explain why for the first question. 3) If the basis remains optimal, will the optimal z value change? If yes, what is the new optimal z value?
1. The price for product 1 increases to $6.00.
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Question 1: Suppose that in the clothing market, production costs have fallen, but the equilibrium priceand quantity purchased have both increased. Based on this information you can concludethat
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