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

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

Inventory control research, Given an inventory system where Yearly demand ...

Given an inventory system where Yearly demand = 120 units Ordering cost = Sh. 45 Price per unit = Sh. 200 Annual carrying cost = 24% of the unit cost Determine The economic or

Computer aid for quantitative data analysis, Normal 0 false ...

Normal 0 false false false EN-IN X-NONE X-NONE

Scope of operations research, Scope of the OR techniques can be derived ...

Scope of the OR techniques can be derived in followings various importance fields: 1. In Agriculture : With the explosion of population and consequent shortage of food O

Analyzing marketing problems and cases , Cases are generally based on certa...

Cases are generally based on certain issues and problems. Diagnostic, analytical and decision making skills help in case solution. A case study or case based assessment is designed

Operation Research, A paper mill produces two grades of paper viz., X & Y. ...

A paper mill produces two grades of paper viz., X & Y. Because of raw material restrictions, it cannot produce more 400 tons of grade X paper & 300 tons of grade Y paper in a week.

Steps of research proposal, Steps of Research Proposal Proposal Con...

Steps of Research Proposal Proposal Content  The researcher is always given instructions for preparing a proposal that indicate the format to be followed. Funding agencie

Simplex method LPP, #questioA paper mill produces two grades of paper viz.,...

#questioA 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

Research process, What kind of research situation do the two new brand...

What kind of research situation do the two new brands present for Mr. Lynn company?

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