Question

The company makes three components which are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows:

Component	Shaper	Grinder
1	6	4
2	4	5
3	4	2

The shaper is available for 120 hours, and the grinder is available for 110 hours. No more than 400 units of component 3 can be sold, but up to 1200 units of each of the other components can be sold. The company already has orders for 800 units of component 1 that must be satisfied. The profit contributions for components 1, 2, and 3 are $10, $8 and $11, respectively.

Formulate the spreadsheet model and solve for the recommended production quantities.

a. Component 1:

b. Component 2:

c. Component 3:

d.  If one more minute could be made available on the shaper, how much would it be worth?
(integer value only, no symbols)

Answer 1

solution:

from the given data,

The shadow price for time available for shaper is $2

If one more minute could be made available on the shaper, it would be worth $2

Thank you.