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Merton Truck Analysis

In: Business and Management

Submitted By curietolia
Words 554
Pages 3
MERTON TRUCK COMPANY

Answer 1:
Decision Variables:
X1: Number of model 101 trucks to be produced
X2: Number of model 102 trucks to be produced
Objective: To maximise operational profit by optimally producing Model 101 and Model 102 trucks
Maximise Z= 3000X1+5000X2
Subject to:
X1+2X2<=4000 (Total machine hours available per month for engine assembly)
2X1+2X2<=6000 (Total machine hours available per month for Metal Stamping)
2X1<=5000 (Total machine hours available per month for Model 101 assembly)
3X2<=4500 (Total machine hours available per month for Model 102 assembly)
X1, X2>=0 (Non-negativity constraints)
Also X1 and X2 should be integers

Answer 2:
Optimal solution for maximum profit
Model 101: 2000 units
Model 102: 1000 units
Optimum total contribution= 11,000,000$

Answer 3:
Optimality range for objective variable: Objective coefficient | Lower side of range | Higher side of range | 3000 | 2500 | 5000 | 5000 | 3000 | 6000 |

If the objective variables move outside the optimality range, the optimal solution for for number of units of Model 101 and Model 102 will change.

Answer 4:
Feasibility range for constraint’s capacity: Constraint | Final value | Lower side of range | Higher side of range | 4000 | 4000 | 3500 | 4500 | 6000 | 6000 | 5500 | 7000 | 5000 | 4000 | 4000 | Infinity | 4500 | 3000 | 3000 | Infinity |

If the current capacity moves outside the optimality range, the optimal solution for number of units of Model 101 and Model 102 will change.

Answer 5:
The optimality range for the probability of Model 101 as given in Answer 3 is between 2500 and 5000. Since 2000$ lies outside this range, the optimal product mix will change. So we do not recommend the product mix.

Answer 6:
The machine-hours available in Metal Stamping department is a binding condition. So, if the machine-hours available reduces

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