A company manufactures and sells three models of large sized pressure cookers for canteen use. While market demands pose no constraints, supplies of aluminum limited to 750 kgs per week and availability of machine time limited to 600 hours per week restrict the product-mix. The resource usage of the three models and their profitability are given below:

(a) Formulate the problem as an LPP and solve for optimal solution.

(b) Using the information in optimal solution tableau, determine whether and how the current solution would be sensitive to the following changes. Treat each of the conditions given below independently.
(i) An additional 150 kg of aluminum would become available.
(ii) The machine hours available would reduce from current level of 600 hours to 450 hours.
(iii) Following a reduction in selling price of M3, its contribution margin decreases by Rs 15.
(iv) What minimum contribution of M2 would make it feature in the optimal solution?
(v) A new model has been developed requiring 3 kg of aluminum and 3 hours of machine time per unit, with an estimated unit contribution of Rs 40. Would it be worthwhile manufacturing this new model?

Transcribed Image Text:

Aluminium/unit Machine-time/unit Contribution Rs/unit M wo Model M 3 4 60 20 20 M3 3550 80