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

Find the maximum and minimum values, Problems based on solution of a given ...

Problems based on solution of a given LPP when it has multiple optimal solution: 1.    Find the maximum and minimum values of 5x+2y, subject to the constraints -2x-3y ≤ -6

Operation research, Discuss the methodology of operation research

Discuss the methodology of operation research

Coding and retrieval , Coding  and Retrieval  If all your  data ar...

Coding  and Retrieval  If all your  data are  word processed on in some  other  computer readable form  it will  be possible  for your  primary  documents  to be accessed d

Dynamic programming, A company is planning its advertising strategy for the...

A company is planning its advertising strategy for the next year for its three major products.

Chi square test - hypothesis testing, Chi Square Test ( X 2 ) Chi Squ...

Chi Square Test ( X 2 ) Chi Square Test Defined  the chi square test is one  simplest  and most  commonly  used non parametric tests in statistical work. The Greek letter X 2

Describe the service tax law in usa and concept of negative, Question 1 ...

Question 1 X Ltd. has Unit C which is not functioning satisfactorily. The following are the details of its fixed assets: Asset Date of acquisiti

Inherent forces fomenting conflicts of interest, Inherent forces fomenting ...

Inherent forces fomenting conflicts of interest Several forces have coalesced to increase the incidence of conflicts of interest in the medical industry: the vertical integrat

Op, A paper mill produces two grades of paper viz., X and Y. Because of raw...

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

Considerations for oral reporting, Considerations for Oral Reporting S...

Considerations for Oral Reporting Sometimes  the researcher has been asked to  make an oral presentation of his  research findings he should  bear in mind a few major  conside

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