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Please see attached for the original assignment/explanation of the current spreadsheet. I'm looking for a sensitivity analysis to be completed on the data displayed using
Please see attached for the original assignment/explanation of the current spreadsheet. I'm looking for a sensitivity analysis to be completed on the data displayed using Solver.
Imelda manages a shoe factory that makes two types of shoes: casual shoes and dress shoes. The factory can make a total of 1,000 pairs of shoes per day. On any given day, it cannot make more than 800 casual pairs of shoes. Each pair of casual shoes needs 2 units of labor, while each pair of dress shoes needs 3 units of labor. The factory has 2,400 units of labor available daily. Each pair of casual shoes earns a profit of $15, while each pair of dress shoes earns a profit of $20. How many pairs of each type should the factory make each day? Your submission should consist of only those exhibits that are specifically asked for. Please ensure that each exhibit is well edited and appropriately formatted. Problem This assignment continues analyzing Imelda's shoe factory. a. In the original formulation, which constraints were binding? b. So far, we have determined the optimal production plan that should be used on a daily basis. If needed, attach Exhibit A with supporting information to back up your answers. To grow her business in the long run, Imelda is considering two options: o Option A: She can hire 40 more units of labor daily at the cost of $4.50 per unit. o Option B: She can invest in technology and increase the daily total capacity by 50 pairs of shoes. This investment has a one-time cost of $50,000. Applying a straight line amortization schedule over one year (250 working days), Imelda finds the daily cost of this investment to be $200. Which option is better? Under Option A: Net impact = Change in production: Under Option B: Net impact = Change in production: Consequently, Option _____ is better. c. Suppose labor costs $5 per unit and the new technology has to be amortized over 6 months. What should Imelda do? d. Ignoring part (c), use SolverTable to discuss the effects of extending labor on the Objective function. Include a well-formatted table as Exhibit B. What would be your recommendation to Imelda? e. Imelda does not want more than 40% of the produced shoes to be casual shoes. Write down this constraint, so that the resulting model is still linear. f. What can you say about the effect of adding the constraint in (e) on the objective function (without rerunning Solver)? Decision Variables Number Produced Objective Function Profit contribution Constraints Labor Limits Min. overall production Max overall production Casual Shoes Dress Shoes 600 400 15 20 2 1 1 3 1 17000 LHS RHS 2400Step by Step Solution
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