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b. Analyze the tactical and strategic information provided by the optimal solution and sensitivity report in Part A: What is an optimal output plan for

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b. Analyze the tactical and strategic information provided by the optimal solution and sensitivity report in Part A: What is an optimal output plan for the company? (0.5 points) What factors could lead to even better level of performance (1.5 points): For each department, what is the marginal value of additional overtime capacity? What is the marginal value of additional advertising dollars? What is the marginal value of additional sales for each product? What is the trade-off between advertising expenditures and increased sales for Hawley Co. If the advertising budget to be increased, how it would affect the production plan? Assume that you increased the advertising budget by the amount of the allowable increase, how this advertising budget change would affect the optimal production plan? (1 point]Costs and prices: ro regular time; o overtime Table lamps (T) Floor lamps [F] Ceiling lamps (C ) Pendant lamps (P] Tr To Fr Fo Cr Co Pr Po Celling price 120 120 150 150 100 100 160 160 Material costs 66 56 85 85 50 50 80 80 Production costs 16 18 16 18 12 15 12 Unit profit 38 36 49 47 38 35 68 65 Department 1 Department 2 Decision Variables: Tr To Fr Fo Cr Co Pr Po Units produced 60000 0 21800 55000 24000 35000 T F C P Advertising 0 18000 Objective function: max (Profit) = Constraints: Capacity constraints: LHS RHS Department 1 regular time 81800 1000 00 Department 1 overtime 0 25000 Department 2 regular time 90000 90000 Department 2 overtime 24000 24000 Demand constraints: Table lamps 60000 60000 Floor lamps 21800 21800 Ceiling lamps 79000 100000 Pendant lamps 35000 35000 Advertising constraint 18000 18000

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