sensitivity - car.pdf

# sensitivity - car.pdf - 21-257 Models and Methods for...

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21-257 Models and Methods for Optimization Fall, 2015 A Sensitivity Analysis Example A thousand automobiles need to be produced by Tucker, Inc. in one month using their four production plants. This is a fairly normal demand for Tucker. Due to technological advances and varying workforce, the plants have varied costs for the production of each car. At each plant, they also use different materials and labor amounts. A labor contract specifies that a minimum of four hundred cars must be produced at the third plant. Here are some questions to be answered by their managemnt: 1. What is the cost of production at the moment? What are the current quantities of production? 2. If it cost only eight thousand dollars to produce a car at the second plant, how much will the solution change? For what cost range is the solution valid for the second plant? How much will the cost be for producing one vehicle? By producing one less, how much will you save? 3. How much is the union contract costing? What value would it be to reduce the car
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