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Unformatted text preview: SECTION 5.2 2a. Decision variables remain the same. New z-Value = Old z-value+10(88) = $33,420 2b. Relevant Shadow Price is -$20. Current basis remains optimal if demand is decreased by up to 3 cars, so Dual Price may be used to compute new z-value. New Profit = $32,540 + (-2) (-20) = $32,580. 4a. Reduced Cost for X12 is 1, so if cost of producing Product 1 at Plant 1 is less than or equal to 6 - 1 = $5, we would produce product 2 at Plant 1. 4b. Shadow Price is $2 and AD = 1000 so new z-value = 128,000- (-1000)2 = $130,000. 4c. AI = $1, so current basis remains optimal. Decision variables remain the same and new z- value = 128,000 + 4000(1) = $132,000. 2 SECTION 5.3 2. Cannot answer this question because current basis is no longer optimal if one more machine is available....
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- Spring '07