Figure 13.31 shows the sensitivity report after solving the Crebo Manufacturing model (Example 13.12)

using Solver. Using only the information in the sensitivity report, answer the following questions.

a. Explain the value of the reduced cost (-0.3) for the number of plugs to produce.

b. If the gross margin for rails is decreased to $1.05, can you predict what the optimal solution and profit will be?

c. Suppose that the gross margin for rivets is increased to $0.85. Can you predict what the optimal solution and profit will be?

d. If the gross margin for clips is reduced to $1.10, can you predict what the optimal solution and profit will be? What if the gross margin is reduced to $1.00?

e. Suppose that an additional 500 minutes of machine capacity is available. How will the optimal solution and profit change? What if planned maintenance reduces capacity by 300 minutes?

Transcribed Image Text:

A B 6 Objective Cell (Max) 618 7 Cell 8 $A$13 Profit 9 C D E Name Final Value 168000 10 Decision Variable Cells LL F 9 H 11 Final Reduced Objective Allowable Allowable 12 Cell Name Value Cost Coefficient Increase Decrease 13 14 15 $B$10 Units Produced Plugs (X1) $C$10 Units Produced Rails (X2) $D$10 Units Produced Rivets (X3) 0 -0.3 0.3 0.3 1E+30 0 -0.2 1.3 0.2 1E+30 0 -0.15 0.75 0.15 1E+30 16 $E$10 Units Produced Clips (X4) 140000 0 1.2 1E+30 0.16000008 17 18 Constraints 19 Final 20 Cell Name 21 $A$16 Capacity Used Value 280000 Shadow Constraint Allowable Allowable Price R.H. Side Increase Decrease 0.6 280000 1E+30 280000