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

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

. 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

OR models, Explain why it may be advantageous to build models to help in so...

Explain why it may be advantageous to build models to help in solving a decision problem.

Advantages of mean deviation - measure of dispersion, Advantages  of Mea...

Advantages  of Mean  Deviation a.It is based on all the  observation . any  change in any  item would  change the value of mean  deviation. b.Mean  deviation  is less  aff

Video tapes - report writing presentation , Video  Tapes  Video  t...

Video  Tapes  Video  tapes  are very  information  and attention  grabbing  presentational  supports. They  are  best  for illustrating the  persons  in actions  and presen

Operation research, Discuss the methodology of operation research

Discuss the methodology of operation research

Cpm/pert, how to make an attractive assignment

how to make an attractive assignment

Non measurable human factors, Operation research makes no allowance for in...

Operation research makes no allowance for intangible factors such as skill attitude vigor of the management people in taking decisions but in many instances success or fail

Operation research and decision making, Operations Research uses the meth...

Operations Research uses the methods of science to understand and explain the phenomena of operating systems. It devises the theories( models ) to explain these phenomena

Prepare an executive level financial report, Research Project I will as...

Research Project I will assign a project for your class. The following description is an example of such a project. I may select the following company, may select a different c

Methodology of operation research, The systematic methodology developed f...

The systematic methodology developed for an operation research study with problems involving conflicting multiple objective policies and alternatives. Operation research in

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