The Perth Mining Company operates two mines for the purpose of extracting gold and silver. The Saddle Mine costs $14,000/day to operate, and it yields 50 oz of gold and 3,000 oz of silver per day. The Horseshoe Mine costs $16,000/day to operate, and it yields 75 oz of gold and 1,000 oz of silver per day. Company management has set a target of at least 650 oz of gold and 18,000 oz of silver. You boss would like you to focus on the following five issues: 1. How many days should each mine be operated so that the target can be met at a minimum cost? 2. Find the range of values that the Saddle Mine's daily operating cost can assume without changing the optimal solution. 3. Find the range of values that the requirement for gold and silver can assume. 4. Find the shadow price for the requirement for gold and silver.
The Perth Mining Company operates two mines for the purpose of extracting gold and silver. The Saddle Mine costs $14,000/day to operate, and it yields 50 oz of gold and 3,000 oz of silver per day. The Horseshoe Mine costs $16,000/day to operate, and it yields 75 oz of gold and 1,000 oz of silver per day. Company management has set a target of at least 650 oz of gold and 18,000 oz of silver. You boss would like you to focus on the following five issues: 1. How many days should each mine be operated so that the target can be met at a minimum cost? 2. Find the range of values that the Saddle Mine's daily operating cost can assume without changing the optimal solution. 3. Find the range of values that the requirement for gold and silver can assume. 4. Find the shadow price for the requirement for gold and silver.
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...
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Transcribed Image Text:The Perth Mining Company operates two mines for the
purpose of extracting gold and silver. The Saddle Mine
costs $14,000/day to operate, and it yields 50 oz of
gold and 3,000 oz of silver per day. The Horseshoe
Mine costs $16,000/day to operate, and it yields 75 oz
of gold and 1,000 oz of silver per day. Company
management has set a target of at least 650 oz of gold
and 18,000 oz of silver. You boss would like you to
focus on the following five issues: 1. How many days
should each mine be operated so that the target can be
met at a minimum cost? 2. Find the range of values
that the Saddle Mine's daily operating cost can assume
without changing the optimal solution. 3. Find the
range of values that the requirement for gold and silver
can assume. 4. Find the shadow price for the
requirement for gold and silver.
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