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

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

.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

Case Analysis, Ask question #Minimum 100 woRead this article and then write...

Ask question #Minimum 100 woRead this article and then write a three-page summary of the application (problem definition, objective function constraints, decision variables, etc.)

Least cost method of transportation model, how do you calculate using this ...

how do you calculate using this method where the least cost appears twice

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

Management Applications of Operation Research, Some areas of applications a...

Some areas of applications are Purchasing, Procurement and Exploration Quantities and timing of purchase Replacement policies Rules for buying, supplies Finance, Budgeting and Inv

Sample size in non propbability- sampling decisions, Sample Size in Non Pro...

Sample Size in Non Propbability The probability  selection does not apply  to purposive  selection. The size  of the  non  probability samples  is selected  in a subjective ma

Characteristics of good average, Characteristics  of Good Average a. ...

Characteristics  of Good Average a. It should  be Rigidly  Defined  An average should  be rigidly defined so that  there is  no confusion  in regard  to its  meaning  and con

Operation research, 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

Queuing theory, A certain type of machine breaks down at an average rate of...

A certain type of machine breaks down at an average rate of 5/hour. the break down is in accordance with Poisson process.cost of idle machine hour is $15/hour. 2 repairmen Peter an

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