Part A

(3) During this semester, EZCo has added a new shoe called the Cosmos to their existing shoe lines of Actos and Ballistics. In addition, EZCO has added many more workers in their departments of Basic and Finishing as indicated by the number of labor hours available and increased their markets in all three shoe lines. A model was developed to find the optimal product mix and provided to you in spreadsheet Problem 4 EZCa Shoes. This model is protected, so you will not be able to change it. A sensitivity report was generated at the optimal solution and shown in the spreadsheet Problem 4 EZCO 3 Sensitivity. Use this report to answer the following questions. Each question is a "stand alone" problem, meaning that the changes to the problem do not accumulate unless specified. You should not build a model to solve this problem. I will base your grade on how you use the sensitivity report to answer these questions, and how well or fully you justify your answers. Answer these questions in the space provided beside the sensitivity report. (a) EZCo has decided to reduce prices by S3 for each pair of shoes, should we change our product mix? Why? (7 pts) (b) If we were approached by an independent marketing rep who claimed that she could sell an additional 20 Ballistics outside of our market, how much in total would we be willing to pay the rep for the additional sales? Why? (7 pts) (c) Suppose we could move hours between basic and finishing. Which direction should we move the hours! Why? (7 pts) (d) Continuing with part (c), how many hours should we move? Why? 7 pts) (e) What is the change in profit? (7 pts) B 1 EZ Co. Production D E F G H N Aeros 300 50 Ballistics Cosmos 100 Total Profit 75 80 45500 300 2 2 2 3 2 1500 1100 CE 3 4 Number of Shoes 5 Unit Profit 6 7 8 Basic Hours per Unit 9 Finishing Hours per Unit 10 Il Max Sales --Acros 12 Max Sales --Ballistics 13 Max Sales-Cosmos 14 15 16 17 18 19 20 Hours Available 1500 1100 Maximum Demand 400 300 250 300 300 100