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

MODERN MANAGEMENT, DISCUSS THE SIGNIFICANCE AND SCOPE OF OPERATION RESEARCH...

DISCUSS THE SIGNIFICANCE AND SCOPE OF OPERATION RESEARCH IN MODERN MANAGEMENT

Service distribution of the machines in a bank, ABC Bank faces a decision t...

ABC Bank faces a decision to hire two clerks or lease two automatic teller machines. Service rates of clerk 1 and clerk 2 are 41 customers per hour and 36 customers per hour respec

Liner programming problem, A constraints in an LPP restricts? (Value of obj...

A constraints in an LPP restricts? (Value of objective function,Value of decision variable,Use of available resources, uncertainty of optimum value) please help me to find out righ

Decision trees, Ask questioA farmer intends to drill a well for his herd. I...

Ask questioA farmer intends to drill a well for his herd. In the past, only 80% of the wells drilled in this area were successful at 12 metres of depth. On finding no water at 12 m

Presentation - report writing presentation , Presentation After  the c...

Presentation After  the completion of any  research  project the concept  techniques  and results  of the  research  projects  should  be presented to the  audience of interes

Linear programming, A paper mill produces two grades of paper viz., X and Y...

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

Linear programming problem, A paper mill produces two grades of paper viz.,...

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

data analysis and research methodology , Case  Study - Data Analysis ...

Case  Study - Data Analysis Sandarsen  inc was testing new  packaging  and a few  recipe  for a family  desert cookie  that had  been  on the  market for several years. It wa

project management , Project Management Your  data need to be orga...

Project Management Your  data need to be organized in such  a way that  access to them  is both  quick  and accurate. In  achieving  this a good qualitative analysis progra

Goal programming, Goal Programming This provides a more realistic model...

Goal Programming This provides a more realistic model. In a modern setting, profit maximization may not be the only objective of a business concern. Other objectives or goals c

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