Kristley Rubber Products manufactures Standard and Deluxe messenger bags. Demand for both bags is high so the company can sell as many as each type as it can produce. Profit margin for the Standard Model is Php 19.60 while for the deluxe model it is Php 26.30. The table below lists the times required to produce each bag and the available resources for different operations.

Item	Resources Required/bags		Resources Available/week
	Standard	Deluxe
Cut and Screw	36 minutes	60 minutes	360 hours
Install hardware	30 minutes	20 minutes	200 hours
Tanned Rubber	4 sq. ft.	4.6 sq. ft	1840 sq. ft.

Questions:

a. Formulate the LP models.

b. Prepare a well-drawn graph on which are plotted all constraints and an arbitrary profit line (ISOPROFIT). Identify the area in the graph that is feasible. Label constraints and profit line with proper identification. Identify the optimum point.

c. How many messenger bags of each type should Kristley produce each week, and why?

d. What is the weekly profit if Kristley produces and sells the number of messenger bags identified in part (c)?

e. Which resources, if any, limit the company's profits?

f. Which resources, if any, are not fully utilized when the company produces the number of messenger bags identified in part (c )? How much unused resources remains?

g. Using the given data generate a sensitivity report using MS Excel Solver to fill up the table below:

Changing Cells

Cell	Name	Final Value	Reduced Cost	Objective Coefficient	Allowable Increases	Allowable Decreases
	Standard
	Deluxe

Constraints

Cell	Name	Final Value	Shadow Prices	Constraints RHS	Allowable Increases	Allowable Decreases
	A: Cut and Sew
	B: Install hardware
	C: Tanned rubber

h. Prepare a table showing how much profits might be increased by adding capacity to the production centers by increasong the amount of tanned rubber available for production. Indicate over what range of increases the values are correct. Complete table below:

Resources	Current Capacity (hours/week)			Analysis
	Available	Used	Idle	Value of added capacity	Valid range
Cut and Sew
Install hardware
Tanned Rubber

i. How many messenger bags of each model should be made each week for maximum profit if the profit margins on the bags are each increased by 25% and all other conditions remain? What will be the maximum weekly profit? Re-run solver with the changes and generate all reports.

j. If the 25% increase in profit margin resulted to a demand limit of selling 210 deluxe models per week and selling only 300 deluxe models per week for standard model and all other conditions remain, how would the additional conditions effect the company's profits? What would limit the company's profits? How well would the new amounts of messenger bags use the company's production resources?

k. How much would the profitability increase if production capacity increases by 40 hours per week for cut-and-sew center and the supply of rubber to increase to 2040 square feet a week? In terms of cost the additional 40 hours for cut-and-sew center will not incur additional costs. However, an additional Php 1.00 per square foot will be paid for any amount greater than 1840 square foot. Conditions in J on profit margin and demand limit apply as well.

l. If the time required to install hardware in each model is reduced by 10% and based on all conditions under question k, what will be the number of each bag to be produced each week? How much profit will be earned? What will put the cap on the profits? Where will they have excess capacity? And how much excess production capacity will there be?