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

Weaning and definition, Weaning  and Definition A systematic  arrange...

Weaning  and Definition A systematic  arrangement of classified  data in labelled columns and  rows  is  known  a statistical table. Turtle has given  a comprehensive defin

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 in

Usefulness of correlation - correlation regression analysis, Usefulness of ...

Usefulness of Correlation 1.Correlation  is very  useful  to economists  to study  the relationship  between  variables  like  price  and quantity  demanded. To businessmen it

Explain research terminology, Q. Explain Research Terminology? Research...

Q. Explain Research Terminology? Research Terminology - Independent and Dependent variables: There are many practical problems in which the values of one variable depend upon t

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

What do you understand by the term operations research, Question : (a) ...

Question : (a) (i) What do you understand by the term "operations research"? (ii) Discuss three common operations research models. (b) Self-service at the university c

Simplex solution, difference between simplex solution procedure for maximis...

difference between simplex solution procedure for maximisation and minimisation

Operation research techniques, High Costs are Involved in the Use of O. R...

High Costs are Involved in the Use of O. R Techniques: O. R techniques usually prove very expensive. Services of specialized persons are invariably called for ( and along w

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