(A)Find an Optimal Solution to the Problem

question 14

Essay

(A)Find an optimal solution to the problem.What is the production plan,and what is the total revenue?
(B)Obtain a sensitivity report for the solution reported in (A).Which constraints are binding?
(C)What is the incremental contribution associated with adding an hour of assembly time? Over what range of increase is the marginal value valid?
(D)What is the value of additional capacity on the polisher? How much increase and decrease in this capacity is possible before a change occurs in the optimal production schedule?
(E)An advertising agency has devised a marketing plan for the Valley Chassis Company that will increase the market for Deluxe chassis.The plan will increase demand by 75 Deluxe chassis per month at a cost of $100 per month.Should Valley adopt the plan? Briefly explain why.
(F)Suppose that four more hours of chassis assembly time could be made available.How much would profit change?
(G)Suppose next that Valley's marketing department proposes lowering the price for a standard chassis from $12 to $11.50 so that more can be sold (since there is slack under the demand constraint).Would the optimal solution change? Explain why,or why not.
(H)If Valley could obtain 1,000 pounds more of raw material (steel or aluminum),which should it procure? How much should they be willing to pay per pound for the steel or aluminum? Explain your answer.
(I)In doing some contingency planning,Valley thinks that the aging stamping machine will soon need to be taken down for repairs that could last 2 months and will cost $10,000.During that time,they can continue to operate by outsourcing the stamping at $2.50 per chassis (deluxe or standard),although the capacity will be reduced from 2,500 to 1,500.What will be the total cost to repair the stamping machine?

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Definitions:

Compliance Strategy

Techniques designed to persuade or influence others to agree with one's requests, rules, or desires.

American Psychological Association

A leading scientific and professional organization representing psychology in the United States, dedicated to advancing the creation, communication, and application of psychological knowledge.

Code of Ethics

A set of principles and guidelines designed to help professionals conduct their business with honesty and integrity.

Foot-In-The-Door Technique

A persuasion strategy that involves getting a person to agree to a small request as a precursor to agreeing to a larger request.