What is the optimal production schedule for this firm

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Reference no: EM13535964

1 What is the optimal production schedule for this firm? What is the profit contribution of each of these products?
Optimal production schedule is Product1 =0 Product 2= 12 and Product 3 = 21. Profit contribution is P1= 0, P2= 12*40 = 480 and P3= 21*35 =735
2.What is the marginal value of an additional hour of time on machine 1? Over what range of time is this marginal value valid?
Marginal value or shadow price is 7.5 and is valid over range 54 to 112.5 hours
3.What is the opportunity cost associated with product 1? What interpretation should be given to this opportunity cost?
Product 1 oppurtunity cost is 12.5 . It means that the cost should be reduce by 12.5 to feature in optimal solution
4How many hours are used for machine 3 with the optimal solution?
Machine 3 has slack of 15 hours and so actual usage is 93-15 = 78 hours
5.How much can the contribution margin for product 2 change before the current optimal solution is no longer optimal?
The contribution margin for product 2 has lowerbound of 17.5 and upper bound of 40

Reference no: EM13535964

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