Highlights
a) Formulate the problem as a linear program and find the optimum solution (using Simplex).
b) From the optimum solution, determine the status of each resource.
a) Determine the optimal product mix.
b) Use the dual prices to prioritize the three processes for possible expansion
c) If additional production hours can be allocated, what would be a fair cost per additional hour for each process?
a) Available leather is increased to 45 ft2
b) Available leather is decreased by 1 ft2
c) Available sewing hours are changed to 38 hours
d) Available sewing hours are changed to 46 hours
e) Available finishing hours are decreased to 15 hours
f) Available finishing hours are increased to 50 hours
g) Would you recommend hiring an additional suing worker for $15 dollars an hour
5. (Ch3 Textbook Prob. 3-84) The Bank of Elkins is allocating a maximum of $200,000 for personal and car loans during the next month. The bank charges 14% for personal loans and 12% for car loans. Both types of loans are repaid at the end of a 1-year period. Experience shows that about 3% of personal loans and 2% of car loans are not repaid. The bank usually allocates at least twice as much money to car loans as to personal loans.
a) Determine the optimal allocation of funds between the two loans and the net rate of return on all the loans.
b) If the percentages of personal and car loans are changed to 4% and 3% respectively, use sensitivity analysis to determine if the optimum solution in (a) will change
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