SCM 314

Based on the “Spreadsheet model” and “Sensitivity” reports provided below, answer the following questions. All answers have to be explained clearly. One word answers will not be sufficient.

1. What is the optimal profit and optimal product mix (number of TV sets, stereos and speakers)?

2. True or False (explain your answer): The total capacity of “chassis”, “picture tube” and “power supply” are completely used up.

3. If the profit per unit of TV Set is changed to $80 (from the current $60) how does that affect the optimal profit mix and objective value? Explain your answer.

4. Going back to the original problem and its solution, suppose that the manufacturer has located additional inventory of chassis from an external source at $ 20 per unit. How many additional chassis should they buy and how will this impact the total profit? Explain your answer.

5. Going back to the original problem and its solution, suppose that the manufacturer has located 75 additional-inventory of speaker cones from an external source at $ 10 per unit. Should the manufacturer buy this and how will this impact the total profit?

6. Going back to the original problem, if you have a budget of up to $2,000 to spend and the cost per unit of electronics is $20 in the open market, how much electronics would you buy? What will be the resulting impact on total profits of this expansion?

7. Can you forecast the change to the optimal value if you bought 250 additional units of Electronics at $20 each? Explain your answer? Going back to the original problem, electronics are now in short supply in the regular market and you have to buy it in the black market? If it costs $30 per unit in the black market, would you buy it? If so, how many? If not, why not?

8. What happens to the optimal product mix and profit if the profit associated with each speakers goes up to $60? Explain your answer.

TV SetStereoSpeaker

Number to Build>>

00600

Part NameInventoryNo. Used

Chassis4500110

Picture Tube2500100

Speaker Cone800600221

Power Supply4500110

Electronics600600211

Profits

By Product>>>$60$50$50

Total30000

Adjustable Cells

FinalReducedObjectiveAllowableAllowable

CellNameValueCostCoefficientIncreaseDecrease

$G$16TV_Set0-4060401E+30

$H$16Stereo005001E+30

$I$16Speaker6000501E+300

Constraints

FinalShadowConstraintAllowableAllowable

CellNameValuePriceR.H. SideIncreaseDecrease

$F$18Chassis No. Used004501E+30450

$F$19Picture Tube No. Used002501E+30250

$F$20Speaker Cone No. Used60008001E+30200

$F$21Power Supply No. Used004501E+30450

$F$22Electronics No. Used60050600200600