ARE 155 – Spring 2010
Final Exam Review  Selected Solutions – Text Form
420.
We use the Sensitivity Report given in Screenshot 49 to answer the following questions.
(a)
Each additional pound of material will increase profit by $0.5. The 2 pounds will therefore cause profit to
increase to $29.
(b)
Each additional hour of labor will increase profit by $1. The 1.5 hours will therefore cause profit to increase to
$29.50.
(c)
First, we check the 100% rule. (1/2) + (1.5/4) = 0.875 < 1. The shadow prices are therefore valid. The new
profit = $28  1.5 x $0.5 + 1 x $1 = $27.75. The deal is not worthwhile.
(d)
First, we check the 100% rule. (0.75/1) + (0.25/1)
≤
1. The solution remains optimal and the shadow prices
are valid. New profit = 2 x $4.75 + 4 x $4.75 = $28.50.
(e)
Decrease in current profit if 1 unit of the new product is produced = 1 x $1 +1 x $0.5 2 x $0 = $1.50. Profit
contribution of new product = $2. Hence, the net profit will increase by $0.50 for each unit produced of the new
product.
527.
Minimalspanning tree model. Optimal solution is shown by the bold arcs. Total length = 45 (= 4,500 feet).
535.
See file P535.XLS. The shortest route is 1–5–9–12–16, and the shortest distance is 74 kilometers.
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 Spring '10
 LUNDBLAD
 $2, $0.50, $28, $0, $1.50

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