Suppose That the Shadow Price for Assembly Time Is $5/hour

question 79

Multiple Choice

Suppose that the shadow price for assembly time is $5/hour. The allowable increase for the assembly time constraint is 40 hours, and the allowable decrease is 30 hours. If all assembly hours were used under the initial LP solution and workers normally make $4/hour but can work overtime for $6/hour, what should management do?

• A) do not change available hours for assembly time
• B) decrease available hours for assembly time by 30 hours
• C) increase available hours for assembly time by 40 hours
• D) decrease available hours for assembly time by 5 hours
• E) increase available hours for assembly time by 5 hours

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Definitions:

Normally Distributed

Describes a distribution that follows a bell curve, where data points are symmetrically distributed around the mean.

Project Account

A dedicated financial account used to track all income and expenditures related to a specific project.

Transferred

Refers to moving or conveying something from one person, place, or situation to another.

Cost Estimates

The process of forecasting the total costs required to complete a project within a defined scope.