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    Merton Truck Company

    Uploaded by

    Sajal Gupta
    The document contains output reports from solving a linear programming optimization problem in Microsoft Excel. The problem aimed to maximize profits for a truck company by determining the optimal product mix across 3 models, subject to capacity constraints. Solver found a solution with profits of $2.4 million by producing 2000 units of Model 101 and 1000 units of Model 102, without using any capacity for Model 103. Sensitivity analysis showed the allowable increases and decreases in capacity before impacting the optimal solution.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Merton Truck Company

    Uploaded by

    Sajal Gupta
    43 views18 pages
    The document contains output reports from solving a linear programming optimization problem in Microsoft Excel. The problem aimed to maximize profits for a truck company by determining the optimal product mix across 3 models, subject to capacity constraints. Solver found a solution with profits of $2.4 million by producing 2000 units of Model 101 and 1000 units of Model 102, without using any capacity for Model 103. Sensitivity analysis showed the allowable increases and decreases in capacity before impacting the optimal solution.

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    The document contains output reports from solving a linear programming optimization problem in Microsoft Excel. The problem aimed to maximize profits for a truck company by determining the optimal product mix across 3 models, subject to capacity constraints. Solver found a solution with profits of $2.4 million by producing 2000 units of Model 101 and 1000 units of Model 102, without using any capacity for Model 103. Sensitivity analysis showed the allowable increases and decreases in capacity before impacting the optimal solution.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    43 views18 pages

    Merton Truck Company

    Uploaded by

    Sajal Gupta
    The document contains output reports from solving a linear programming optimization problem in Microsoft Excel. The problem aimed to maximize profits for a truck company by determining the optimal product mix across 3 models, subject to capacity constraints. Solver found a solution with profits of $2.4 million by producing 2000 units of Model 101 and 1000 units of Model 102, without using any capacity for Model 103. Sensitivity analysis showed the allowable increases and decreases in capacity before impacting the optimal solution.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 18

    Microsoft Excel 14.

    0 Answer Report
    Worksheet: [Merton Truck Company.xlsx]1 a
    Report Created: 13-11-2019 22:29:40
    Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
    Solver Engine
    Engine: Simplex LP
    Solution Time: 0.031 Seconds.
    Iterations: 3 Subproblems: 0
    Solver Options
    Max Time Unlimited, Iterations Unlimited, Precision 0.000001
    Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative

    Objective Cell (Max)


    Cell Name Original Value Final Value
    $C$16 max profits Model 101 -8600000 2400000

    Variable Cells
    Cell Name Original Value Final Value Integer
    $C$19 Product mix Model 101 0 2000 Integer
    $D$19 Product mix Model 102 0 1000 Integer

    Constraints
    Cell Name Cell Value Formula Status Slack
    $H$11 <= 4000 $H$11<=$F$11 Binding 0
    $H$12 <= 6000 $H$12<=$F$12 Binding 0
    $H$13 <= 4000 $H$13<=$F$13 Not Binding 1000
    $H$14 <= 3000 $H$14<=$F$14 Not Binding 1500
    $C$19=Integer
    $D$19=Integer
    Microsoft Excel 14.0 Sensitivity Report
    Worksheet: [Merton Truck Company.xlsx]1 a
    Report Created: 13-11-2019 22:30:27

    Variable Cells
    Final Reduced Objective Allowable Allowable
    Cell Name Value Cost Coefficient Increase Decrease
    $C$19 Product mix Model 101 2000 0 3000 2000 500
    $D$19 Product mix Model 102 1000 0 5000 1000 2000

    Constraints
    Final Shadow Constraint Allowable Allowable
    Cell Name Value Price R.H. Side Increase Decrease
    $H$11 <= 4000 2000 4000 500 500
    $H$12 <= 6000 500 6000 500 1000
    $H$13 <= 4000 0 5000 1E+030 1000
    $H$14 <= 3000 0 4500 1E+030 1500
    Microsoft Excel 14.0 Limits Report
    Worksheet: [Merton Truck Company.xlsx]1 a
    Report Created: 13-11-2019 22:30:27

    Objective
    Cell Name Value
    $C$16 max profits Model 101 2400000

    Variable Lower Objective Upper Objective


    Cell Name Value Limit Result Limit Result
    $C$19 Product mix Model 101 2000 0 -3600000 2000 2400000
    $D$19 Product mix Model 102 1000 0 -2600000 1000 2400000
    Model 101 Model 102
    SP 39000 38000
    CP 36000 33000 *Direct Cost + Variable Cost
    Fixed Cost 8600000

    Machine hrs/unit Total hrs/month


    Constraints Model 101 Model 102
    Engine Assembly 1 2 <= 4000
    Metal Stamping 2 2 <= 6000
    Model 101 Assembly 2 0 <= 5000
    Model 102 Assembly 0 3 <= 4500

    max profits 2400000

    Model 101 Model 102


    Product mix 2000 1000
    4000
    6000
    4000
    3000
    Model 101 Model 102
    SP 39000 38000
    CP 36000 33000 *Direct Cost + Variable Cost
    Fixed Cost 8600000

    Machine hrs/unit Total hrs/month


    Constraints Model 101 Model 102
    Engine Assembly 1 2 <= 4001
    Metal Stamping 2 2 <= 6000
    Model 101 Assembly 2 0 <= 5000
    Model 102 Assembly 0 3 <= 4500

    max profits 2400000

    Model 101 Model 102


    Product mix 2000 1000

    2000 is the shadow price


    4000
    6000
    4000
    3000
    Model 101 Model 102
    SP 39000 38000
    CP 36000 33000 *Direct Cost + Variable Cost
    Fixed Cost 8600000

    Machine hrs/unit Total hrs/month


    Constraints Model 101 Model 102
    Engine Assembly 1 2 <= 4100
    Metal Stamping 2 2 <= 6000
    Model 101 Assembly 2 0 <= 5000
    Model 102 Assembly 0 3 <= 4500

    max profits 2400000

    Model 101 Model 102


    Product mix 2000 1000

    2000 is the shadow price


    4000
    6000
    4000
    3000
    Model 101 Model 102
    SP 39000 38000
    CP 36000 33000 *Direct Cost + Variable Cost
    Fixed Cost 8600000

    Machine hrs/unit Total hrs/month


    Constraints Model 101 Model 102
    Engine Assembly 1 2 <= 4500
    Metal Stamping 2 2 <= 6000
    Model 101 Assembly 2 0 <= 5000
    Model 102 Assembly 0 3 <= 4500

    max profits 2400000

    Model 101 Model 102


    Product mix 2000 1000

    2000 is the shadow price


    500 is the allowable increase for Engine assembly, which can be added before there is a change in the value of a
    (lower and upper range for which the shadow price is valid)
    4000
    6000
    4000
    3000

    there is a change in the value of an additional unit of capacity


    Model 101 Model 102
    SP 39000 38000
    CP 36000 33000 *Direct Cost + Variable Cost
    Fixed Cost 8600000

    Machine hrs/unit Total hrs/month


    Constraints Model 101 Model 102
    Engine Assembly 1 2 <= 4500
    Metal Stamping 2 2 <= 6000
    Model 101 Assembly 2 0 <= 5000
    Model 102 Assembly 0 3 <= 4500

    max profits 2400000

    Model 101 Model 102


    Product mix 2000 1000

    Since the capacity of Engine assembly can be increased by 500 machine hrs with corresponding profit contributio
    4000
    6000
    4000
    3000

    th corresponding profit contribution of 2000; so maximum rent = 2000 and maximum hrs = 500
    Microsoft Excel 14.0 Answer Report
    Worksheet: [Merton Truck Company.xlsx]3
    Report Created: 13-11-2019 23:22:34
    Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
    Solver Engine
    Engine: Simplex LP
    Solution Time: 0.031 Seconds.
    Iterations: 3 Subproblems: 0
    Solver Options
    Max Time Unlimited, Iterations Unlimited, Precision 0.000001
    Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative

    Objective Cell (Max)


    Cell Name Original Value Final Value
    $C$16 max profits Model 101 2400000 2400000

    Variable Cells
    Cell Name Original Value Final Value Integer
    $C$19 Product mix Model 101 2000 2000 Contin
    $D$19Product mix Model 102 1000 1000 Contin
    $E$19 Product mix Model 103 0 0 Contin

    Constraints
    Cell Name Cell Value Formula Status Slack
    $I$11 <= 4000 $I$11<=$G$11 Binding 0
    $I$12 <= 6000 $I$12<=$G$12 Binding 0
    $I$13 <= 4000 $I$13<=$G$13 Not Binding 1000
    $I$14 <= 3000 $I$14<=$G$14 Not Binding 1500
    Microsoft Excel 14.0 Sensitivity Report
    Worksheet: [Merton Truck Company.xlsx]3
    Report Created: 13-11-2019 23:22:34

    Variable Cells
    Final Reduced Objective Allowable Allowable
    Cell Name Value Cost Coefficient Increase Decrease
    $C$19 Product mix Model 101 2000 0 3000 2000 500
    $D$19 Product mix Model 102 1000 0 5000 1000 2000
    $E$19 Product mix Model 103 0 -350 2000 350 1E+030

    Constraints
    Final Shadow Constraint Allowable Allowable
    Cell Name Value Price R.H. Side Increase Decrease
    $I$11 <= 4000 2000 4000 500 500
    $I$12 <= 6000 500 6000 500 1000
    $I$13 <= 4000 0 5000 1E+030 1000
    $I$14 <= 3000 0 4500 1E+030 1500
    Microsoft Excel 14.0 Limits Report
    Worksheet: [Merton Truck Company.xlsx]3
    Report Created: 13-11-2019 23:22:35

    Objective
    Cell Name Value
    $C$16 max profits Model 101 2400000

    Variable Lower Objective Upper Objective


    Cell Name Value Limit Result Limit Result
    $C$19 Product mix Model 101 2000 0 -3600000 2000 2400000
    $D$19 Product mix Model 102 1000 0 -2600000 1000 2400000
    $E$19 Product mix Model 103 0 0 2400000 0 2400000
    Model 101 Model 102
    SP 39000 38000
    CP 36000 33000 *Direct Cost + Variable Cost
    Fixed Cost 8600000

    Machine hrs/unit Total hrs/month


    Constraints Model 101 Model 102 Model 103
    Engine Assembly 1 2 0.8 <= 4000
    Metal Stamping 2 2 1.5 <= 6000
    Model 101 Assembly 2 0 1 <= 5000
    Model 102 Assembly 0 3 0 <= 4500

    max profits 9117142.86

    Model 101 Model 102 Model 103


    Product mix 2000 1000 2857.14286 This is the value when contribution of M

    Model 103 reduced cost is -350 so to make Model 103 worthy of production, its contribution should be atleast 23
    6285.714
    10285.71
    6857.143
    3000

    he value when contribution of Model 103 is taken as 2351 instead of 2000

    ontribution should be atleast 2350

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