ABC Automobiles

Answer-1(b)
Finding the best product mix when engine capacity is increased to 4001

Decision Variables X1 X2
Solution 1999 1001
Co-efficient 3000 5000

Objective Function
Maximize 11002000

subject to
coefficient
Constraints of X1 coefficient of X2 Inequality RHS

Constraint 1 1 2 <= 4001

Constraint 2 2 2 <= 6000
Constraint 3 2 0 <= 5000
Constraint 4 0 3 <= 4500

The best product mix is to produce 1999 units of Model A Truck and 1001 units of Model B Truck
Increase in contribution (worth of extra unit) = Contribution at 4001 units capacity - Contribution at 4000 units capacity
= 11002000-11000000
= 2000
The shadow price of engine assembly capacity is 2000 as highlighted in the sensitivity report given below. This is
the worth of extra unit of engine capacity

Microsoft Excel 16.0 Answer Report

Worksheet: [1b]1b
Report Created: 31-12-2022 20:15:43
Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
Solver Engine
Engine: Simplex LP
Solution Time: 0.015 Seconds.
Iterations: 3 Subproblems: 0
Solver Options
Max Time Unlimited, Iterations Unlimited, Precision 0.000001, Use Automatic Scaling
Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative

Objective Cell (Max)

Cell Name Original Value Final Value
$B$12 Maximize 0 11002000

Variable Cells
Cell Name Original Value Final Value Integer
$C$8 Solution X1 0 1999 Contin
$D$8 Solution X2 0 1001 Contin

Constraints
Cell Name Cell Value Formula Status Slack
$L$16 <= 4001 $L$16<=$F$16 Binding 0
$L$17 <= 6000 $L$17<=$F$17 Binding 0
$L$18 <= 3998 $L$18<=$F$18 Not Binding 1002
$L$19 <= 3003 $L$19<=$F$19 Not Binding 1497

Microsoft Excel 16.0 Sensitivity Report

Worksheet: [1b]1b
Report Created: 31-12-2022 20:15:43

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$C$8 Solution X1 1999 0 3000 2000 500
$D$8 Solution X2 1001 0 5000 1000 2000

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$L$16 <= 4001 2000 4001 499 501
$L$17 <= 6000 500 6000 501 998
$L$18 <= 3998 0 5000 1E+030 1002
$L$19 <= 3003 0 4500 1E+030 1497
2000
1000