Assignment 8

Assignment 8 - Caf Compliance in the Auto Industry 1 The...

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Café Compliance in the Auto Industry 1. The model is ! PASSENGR CAR MILES PER GALLON; PASSMPG = 30; ! LIGHT TRUCK MILES PER GALLON; LTRUCKMPG = 20; ! PP - PASSENGER CAR PRICE; ! TP - LIGHT TRUCK PRICE; ! PD - PASSENGER CAR DEMAND ! TD - LIGHT TRUCK DEMAND; PD = 750 - 20*PP; TD = 830 - 17*TP; PCOST = 15; TCOST = 17; MAX = PD*(PP - PCOST) + TD*(TP - TCOST); The objective function PD*(PP - PCOST) + TD*(TP - TCOST) is the desired contribution margin. 2. The LINGO solution to the above model is Local optimal solution found. Objective value: 6835.382

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Extended solver steps: 5 Total solver iterations: 37 Variable Value Reduced Cost PASSMPG 30.00000 0.000000 LTRUCKMPG 20.00000 0.000000 PD 225.0000 0.000000 PP 26.25000 0.000000 TD 270.5000 0.000000 TP 32.91176 0.000000 PCOST 15.00000 0.000000 TCOST 17.00000 0.000000 Row Slack or Surplus Dual Price 1 0.000000 0.000000 2 0.000000 0.000000 3 0.000000 11.25000 4 0.000000 15.91176 5 0.000000 -225.0000 6 0.000000 -270.5000 7 6835.382 1.000000 3. As seen from the LINGO solution in question 2, 225 passenger cars are sold and 270.5 light trucks are sold.

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Unformatted text preview: 4. 5. The Café average is CAFEAVG = (PD + TD)/ ( (PD/PASSMPG)+(TD/LTRUCKMPG) ) ; which for the solu±on in 2 is 23.56718. 6. Adding CAFEAVG = (PD + TD)/ ( (PD/PASSMPG)+(TD/LTRUCKMPG) ) ; and CAFEAVG > 25; to the LINGO model gives Local op±mal solu±on found. Objec±ve value: 6274.514 Extended solver steps: 5 Total solver itera±ons: 39 Variable Value Reduced Cost PASSMPG 30.00000 0.000000 LTRUCKMPG 20.00000 0.000000 PD 287.0601 0.000000 PP 23.14700-0.4696744E-08 TD 191.3734 0.000000 TP 37.56627 0.000000 PCOST 15.00000 0.000000 TCOST 17.00000 0.000000 CAFEAVG 25.00000 0.000000 Row Slack or Surplus Dual Price 1 0.000000 296.9150 2 0.000000 445.3716 3 0.000000 14.35300 4 0.000000 11.25726 5 0.000000-287.0601 6 0.000000-191.3734 7 0.000000 712.5989 8 6274.514 1.000000 9 0.000000-712.5989 CitaTon Anderson, Sweeney, Williams, Camm, and MarTn. QuanTtaTve Methods in Business GBS220. 13th ed. Mason: Cengage Learning, 2010. Print....
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• Fall '09
• MARIEMAIN
• Automobile, Van, Mathematical optimization, Cengage Learning, Local optimal solution, Total solver iterations

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