2 ABCD company is an office equipment company that produces two types of desks: standard and deluxe. Deluxe desks have oak tops, more expensive hardware, and require additional time for finishing and polishing. Standard desks require 80 square feet of pine and 10 hours of labor, while deluxe desks require 60 square feet of pine, 18 square feet of oak, and 16 hours of labor. For the next week, the company has 5,000 square feet of pine, 750 square feet of oak, and 400 hours of labor available. Standard desks net a profit of $150, while deluxe desks net a profit of $320. All desks can be sold to national chains shops.   Instructions: If the spreadsheet and Excel Solver results are given to you as follows (see Table 1 below), address the following questions: What are your Binding Constraints? What is your Optimum profit [hint: maximized profit]? What are your slack values for Pine, Oak, and Labor? Looking at the Shadow prices, how much would the objective profit increase by if you were to increase labor hours by 50? If the optimum solution for standard desk stays the same, but deluxe desk numbers increased, what would be your estimated deluxe desks in this case? Would you recommend this option? Why? Hints: Notice that by increasing labor hours by 50, the S stays as an original optimum solution given in the information of Solver, but D will increase. The question is asking you to find how much the objective profit would go up and what would be the estimated number for D [calculated from your constraints. Decimal number is accepted]. What would be the changes in objective profit $, if we increase the Pine by one unit and the Oak by one unit, i.e., Pine available=5001 and Oak available=751. What % of available Oak can be reduced without it affecting the current (given) optimum solution? What % of available Pine can be reduced without affecting the current (given) optimum solution? How much should the standard desk unit profit of $150 be increased by in order for Standard desks to be produced (i.e. become a positive number)?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
icon
Related questions
Question

2

ABCD company is an office equipment company that produces two types of desks: standard and deluxe. Deluxe desks have oak tops, more expensive hardware, and require additional time for finishing and polishing. Standard desks require 80 square feet of pine and 10 hours of labor, while deluxe desks require 60 square feet of pine, 18 square feet of oak, and 16 hours of labor. For the next week, the company has 5,000 square feet of pine, 750 square feet of oak, and 400 hours of labor available. Standard desks net a profit of $150, while deluxe desks net a profit of $320. All desks can be sold to national chains shops.

 

Instructions:

If the spreadsheet and Excel Solver results are given to you as follows (see Table 1 below), address the following questions:

  1. What are your Binding Constraints?
  2. What is your Optimum profit [hint: maximized profit]?
  3. What are your slack values for Pine, Oak, and Labor?
  4. Looking at the Shadow prices, how much would the objective profit increase by if you were to increase labor hours by 50?
  5. If the optimum solution for standard desk stays the same, but deluxe desk numbers increased, what would be your estimated deluxe desks in this case? Would you recommend this option? Why? Hints: Notice that by increasing labor hours by 50, the S stays as an original optimum solution given in the information of Solver, but D will increase. The question is asking you to find how much the objective profit would go up and what would be the estimated number for D [calculated from your constraints. Decimal number is accepted].
  6. What would be the changes in objective profit $, if we increase the Pine by one unit and the Oak by one unit, i.e., Pine available=5001 and Oak available=751.
  7. What % of available Oak can be reduced without it affecting the current (given) optimum solution?
  8. What % of available Pine can be reduced without affecting the current (given) optimum solution?
  9. How much should the standard desk unit profit of $150 be increased by in order for Standard desks to be produced (i.e. become a positive number)?

 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 1 steps

Blurred answer
Knowledge Booster
Inventory management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.