Aunt Anastasia can obtain an additional 10 hours of kin capacity free of charge
ID: 1721289 • Letter: A
Question
Aunt Anastasia can obtain an additional 10 hours of kin capacity free of charge from a friend. What would be the impact on profits if she obtains 10 hours of additional kin capacity?
Aunt Anastasia operates a small business: she produces seasonal ceramic objects to sell to tourists. For the spring, she is planning to make baskets. es, and rabbits. Aunt Anastasia also has committed to make 25 rabbits for a charitable organization. The following table summarizes the information that was obtained from Aunt Anastasia Paint & Seal (hr 0.250 0.333 0.750 80 hours ProfitUnit (S $2.50 $1.50 $2.00 ProductMix Mold Baskets irements(bKin (Units) 0.500 0.333 0.250 20 pounds Rabbits Capacitv The following model has been formulated based on the information given above B-number of baskets produced E number of eggs produced R = number of rabbits produced Maximize 2.5B+ 1.5E+2R Subjected to: 0.5 B ÷ 0.333E ÷ 025R 20 0.25B * 0.333E 0.75R 80 R2 25 The sensitivity report obtained from the Excel Solver is given below Adjustable Cells Final Reduced Objective Allowable Allowable Value Cost Coefficient Increase Decrease 0.5 Cell SCS3 Units to produce Baskets SDS3 Units to produce Eggs SES3 Units to Namee 2.5 1.5 25 1E+30 uce Rabbits 0 0.5 1E+30 Constraints Cell SF$6 Mix/Mold capacit SFS7 Kin capacity SFS8 Paint & Seal capacity SF$9 Min requirements of Rabbit Final Shadow Constraint Allowable Allowable R.H. Side Increase Decrease 1.25 25 Name Value Price R 18.75 50 25 20 E+30 2.5 2.5 0 0.5 25 25Explanation / Answer
Since allowable increase is only 2.5
For only 2.5 units the profit increases by 2.5 shadow price and beyond that there is no increase.
The profit will increase by 2.5*2.5 =6.25.
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