Interpreting Computer Output—One Constraint: Computer output for problem 13-24 is as follows:

Required:

Interpret the computer output for this problem by answering the following questions:

a. Formulate the objective function for this problem.

b. What is the optimal production level of product X?

c. What is the total contribution at the optimal production level? How was it computed?

d. How much would the company be willing to pay for an additional hour of machining capacity?

e. Product Y shows a reduced value of $1.67. Explain the meaning of this value.

f. Suppose that an error was made in figuring out the contribution margin for product Y. The contribution margin for product Y is supposed to be $41 instead of $40. What is the optimal production level for Y?

Transcribed Image Text:

Summary of Problem Objective Function Value: $30,000 Reduced Variable Value Value Product X 600.00 0.0 Product Y 0.0 $1.67 Product Z 0.0 0.0 SHADOW CONSTRAINT TYPE VALUE PRICE Machining time Slack 0.0 $166.67 Objective Function Coefficient Ranges: Current Allowable Allowable Variable Coefficient Increase Decrease Product X $50.00 Infinity $0.0 Product Y 40.00 $1.67 Infinity Product Z 25.00 0.0 Infinity Right-Hand-Side Ranges Current Allowable Allowable RHS Increase Decrease Machining time 180.00 Infinity 180.00