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

Determine phases-states-decisions and probability , G. Ambler has € 10000 ...

G. Ambler has € 10000 available for a second hand car, but would like to buy a fast car that costs € 25000. He needs the money for that car quickly, and would like to increase his

Disadvantages of mean deviation - measure of dispersion, Disadvantages of ...

Disadvantages of Mean Deviation a.Mean deviation ignores  the algebraic  signs of the deviations and  such it is  not capable  of further algebraic  treatment. b.It is  no

One, Edwards Life Sciences is trying to decide if it should sell a new type...

Edwards Life Sciences is trying to decide if it should sell a new type of medical product. Fixed costs associated to the production of the product are estimated to be $30,000. Th

Examine the future sustainability of business, In your role as a Consultant...

In your role as a Consultant to a renowned organisation or institution, you have been asked to design and submit a research proposal to examine the future sustainability of its bus

Scope., what is the scope of operational research in india ? explain with t...

what is the scope of operational research in india ? explain with the job names.

Research methodology, In research methodology we not only discuss the res...

In research methodology we not only discuss the research methods but also consider the logic behind the method we use in the context of our research study and explain wh

Models, Which model is described as a rule of thumb

Which model is described as a rule of thumb

Attitude measurement and methodology , Case Study  - Attitude Measurement ...

Case Study  - Attitude Measurement National Kitchens For  several years  the management  of national kitchens a diversified packaged foods manufacturer  had been  watch

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