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Homework 3

Ranlux wants to maximize profit from manufacturing air conditioning units given production limitations. An Excel linear optimization model was developed and solved to determine the optimal production plan, resulting in a monthly profit of $450,000 for Micro units, $975,000 for Personal units, $0 for Residential units, and $660,000 for Industrial units. The sensitivity report showed that the Residential min, Personal max, Micro max, and Storage constraints were binding. Changes to the profits or capacities of certain units based on the sensitivity report would not change the optimal solution.

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59 views

Homework 3

Ranlux wants to maximize profit from manufacturing air conditioning units given production limitations. An Excel linear optimization model was developed and solved to determine the optimal production plan, resulting in a monthly profit of $450,000 for Micro units, $975,000 for Personal units, $0 for Residential units, and $660,000 for Industrial units. The sensitivity report showed that the Residential min, Personal max, Micro max, and Storage constraints were binding. Changes to the profits or capacities of certain units based on the sensitivity report would not change the optimal solution.

Uploaded by

Andrew Orlando
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Ranlux wants to determine how many of each air conditioning units should be manufactured given all of

the limitations such that they achieve the maximum possible profit. Develop, implement, and solve the
linear optimization problem in Excel to determine the optimal production plan (do not require your
variables to be integers!)

Once the model is solved, answer the following questions:

What is the monthly profit and monthly production for each air conditioner type?

Micro= $450,000; Personal=$975,000; Residential= $0; Industrial=$660,000

Run the sensitivity report. Which constraints are binding?

Residential min, Personal max, Micro max, Storage

Only using the sensitivity report (do not change the value and re-run the model), would the optimal
production plan change if the profit for each Micro air conditioner change to 950? If your answer is yes,
explain your reasoning. If your answer is no, what is the new monthly profit and explain your calculation.

No, in the sensitivity report, it gives us an allowable increase of infinity, so we can increase it as much as
we want but, we will still only make a final value of 500 (unchanged).

Only using the sensitivity report (do not change the value and re-run the model), would the optimal
production plan change if the profit for each Residential air conditioner change to 1700? If your answer
is yes, explain your reasoning. If your answer is no, what is the new monthly profit and explain your
calculation.

No, it would not change because in the sensitivity report, it has an allowable increase of 400, and any
increase underneath 400 will result in a final value of 100 (unchanged).

Only using the sensitivity report (do not change the value and re-run the model), can you determine the
new objective function value without re-running the model if the number of hours available in the
Stamping department change to 8100? If your answer is no, explain your reasoning. If yes, what is the
new monthly profit and explain your calculation.

No, it cannot change because the constraint is 8000, so it stops it. We would have to change the
constraint and rerun the entire model.

Only using the sensitivity report (do not change the value and re-run the model), can you determine the
new objective function value without re-running the model if the number of hours available in the
Welding department change to 7000? If your answer is no, explain your reasoning. If yes, what is the
new monthly profit and explain your calculation.

No, it does not since the allowable increase is infinity the final value will remain 4230.

Note: When optimizing in Excel, use Standard LP Engine.

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