Unformatted text preview: we would be willing to pay 1 + 0 . 75 = 1 . 75). (c). What would product 1 have to sell ±or to make it desirable ±or the company to produce it? Its current sale pice plus the reduced cost 6.25. (d). I± 100 hours o± labor could be purchased, what would the company’s proft be? The increase is 10090 = 10 ≤ 18 which is the allowable increase. The new proft would be 97 . 5 + 10 · . 75 = 105. (e). Find the new optimal solution o± product 3 sold ±or $15. The increase is 1513 = 2 ≤ 3 which is the allowable increase. The new proft would be 97 . 5 + 2 · 7 . 5 = 112 . 5. (e). A 4th product is being considered. It sells ±or $10 and requires 4 hours o± labor and 3 units o± raw material. Shoul the company produce any o± this new product in a new optimal solution? Price out the new product: 4 · 1 . 75 + 3 · . 5 = 8 . 5 < 10 so yes, the company would want to make this 4th product....
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 Fall '08
 Arkin,E
 The Current, The Shadow, Shadow price, Reduced cost

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