# Project Week 1

Answer the following questions using the enclosed computer output: a) What is the optimal production schedule for this firm? What is the profit contribution of each of these products? Answer: x1 = 0, x2 = 12, x3 = 21 profit = 1215

Contribution of x1 = 0, x2= 480, x3= 735

b) What is the marginal value of an additional hour of time on machine 1? Over what range of time is this marginal value valid? Answer: 7.5 range 54–112.5

c) What is the opportunity cost associated with product 1? What interpretation should be given to this opportunity cost? Answer: 12.5

For each unit produced of product 1, we would loose 12.5 from the profits. d) How many hours are used for machine 3 with the optimal solution? Answer: 78

d) How much can the contribution margin for product 2 change before the current optimal solution is no longer optimal? Answer: (17.5–70)

Solution to Problem 1 of the Assignment:

Solution to Problem 2 of the assignment

Solution:

Let M be the number of units for milk

C be the number of units for chicken

B be the number of units for bread

V be the number of units for Vegetable

Objective Function:

Minimize Z= 0.42 M + 0.68 C + 0.32 B + 0.17 V

Constraints

160M + 210C + 120B + 150V = 300

90M + 190C + 90B + 130V >= 250

50M + 50C + 75B + 70V >= 60

210C / (160M + 210C + 120B + 150V) = 18

M, C, B, V >= 0

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