MGMT 30600
Solutions to Review Problems for Exam 1
I.
1. b
2. a
3. d
4. c
5. b
6. c
II.
7. d
8. d
9. d
10. c
11. c
12. d
13. a
III.
(a)
This corresponds to increasing the RHS of the “Capacity” constraint by
10. The shadow price is 3600 for each unit of increase (10 is within the
allowable increase). Total profit will increase by 10SP = 10 (3600) =
$36000.
(b)
This is a decrease of 10 in the RHS of “T Orders” constraint. 10 is within
allowable decrease and the corresponding SP = 0, so there is no change.
(c)
Consider the “RE stock” constraint. The shadow price is 1400 for an
allowable increase of 20. Therefore, if the price offered by the new
supplier is less than $1400, then Pluto would consider buying from this
supplier.
(d)
The selling price for regular cars is $15,000. For an increase of up to $600
in the coefficient of R, the optimal solution does not change. Pluto needs
to increase the price by more than $600, that is, to a price of at least
$15,600.
(e)
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 Spring '08
 Staff
 Management, Operations Research, Linear Programming, Optimization, Allowable Increase

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