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A company manufactures and sells three models of large sized pressure cooker for canteen use. While market demands pose no constraints, supplies of aluminium limited to 750 kg per week and availability of machine time limited 600 hours per week restrict the product mix. The resources usage of the models and their profitability are given below: Model M1 M2 M3 Aluminium/unit 6+X 3+X 5+X Machine-time/unit 3+X 5+X 5+X Contribution (Z/unit) 60+XX 20+XX 80+XX a. Formulate the problem as an LPP and solve for optimal solution.

A company manufactures and sells three models of large sized pressure cooker for canteen use. While market demands pose no constraints, supplies of aluminium limited to 750 kg per week and availability of machine time limited 600 hours per week restrict the product mix. The resources usage of the models and their profitability are given below: Model M1 M2 M3 Aluminium/unit 6+X 3+X 5+X Machine-time/unit 3+X 5+X 5+X Contribution (Z/unit) 60+XX 20+XX 80+XX a. Formulate the problem as an LPP and solve for optimal solution.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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use xx=82 and x=2 do manually
15. A company manufactures and sells three models of large sized pressure cooker for canteen use. While market demands pose no constraints, supplies of aluminium limited to 750 kg per week and availability of machine time limited 600 hours per week restrict the product mix. The resources usage of the models and their profitability are given below: Model M1 M2 M3 Aluminium/unit 6+X 3+X 5+X Machine-time/unit 3+X 5+X 5+X Contribution (/unit) 60+XX 20+XX 80+XX 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 condition given below independently. An additional 150 kg of aluminium would become available. i. ii. The machine hour 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 15. iv. What minimum contribution of M2 would make it feature in the optimal solution? A new model has been developed requiring three kg of aluminium and three hours of V. machine time per unit, with an estimate unit contribution of 740. Would it be worthwhile manufacturing this new model?
Transcribed Image Text:15. A company manufactures and sells three models of large sized pressure cooker for canteen use. While market demands pose no constraints, supplies of aluminium limited to 750 kg per week and availability of machine time limited 600 hours per week restrict the product mix. The resources usage of the models and their profitability are given below: Model M1 M2 M3 Aluminium/unit 6+X 3+X 5+X Machine-time/unit 3+X 5+X 5+X Contribution (/unit) 60+XX 20+XX 80+XX 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 condition given below independently. An additional 150 kg of aluminium would become available. i. ii. The machine hour 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 15. iv. What minimum contribution of M2 would make it feature in the optimal solution? A new model has been developed requiring three kg of aluminium and three hours of V. machine time per unit, with an estimate unit contribution of 740. Would it be worthwhile manufacturing this new model?
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