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# ARE_155_Selected_Answers_Text_Format[1] - ARE 155 Spring...

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ARE 155 – Spring 2010 Final Exam Review - Selected Solutions – Text Form 4-20. We use the Sensitivity Report given in Screenshot 4-9 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. 5-27. Minimal-spanning tree model. Optimal solution is shown by the bold arcs. Total length = 45 (= 4,500 feet). 5-35. See file P5-35.XLS. The shortest route is 1–5–9–12–16, and the shortest distance is 74 kilometers.

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ARE_155_Selected_Answers_Text_Format[1] - ARE 155 Spring...

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