Brs Mdm3 Tif Ch04

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Managerial Decision Modeling w/ Spreadsheets, 3e (Balakrishnan/Render/Stair)
Chapter 4 Linear Programming Sensitivity Analysis

4.1 Chapter Questions

1) Surplus is typically associated with which type of constraints?
A) ≤
B) ≥
C) =
D) ≠
E) ±
Answer: B
Page Ref: 124
Topic: Sensitivity Analysis Using Graphs
Difficulty: Easy

2) Assume that the shadow price of a non-binding "≤" constraint is 5. This implies that:
A) if the right-hand side value of the constraint increases by 1 unit, the objective function value will increase by 5 units
B) if the right-hand side value of the constraint increases by 1 unit, the objective function value will decrease by 5 units
C) if the right-hand side value of the constraint increases by 1 unit,
…show more content…
Each week there are 300 pounds of material 1; 400 pounds of material 2; and 200 hours of labor. The output of product A should not be more than one-half of the total number of units produced. Moreover, there is a standing order of 10 units of product C each week.

Formulation
Max 10A + 10B + 10C
Subject to: 3A + B + 5C ≤ 300 (constraint #1) 2A + 4B ≤ 400 (constraint #2) 4A + 2B + 3.5C ≤ 200 (constraint #3) C ≥ 10 (constraint #4) A, B, C ≥ 0

9) Which constraints are binding?
A) 1 and 2
B) 1 and 4
C) 2 and 3
D) 3 and 4
E) 2 and 4
Answer: D
Page Ref: 130
Topic: Sensitivity Analysis Using Graphs
Difficulty: Easy

10) What is the optimal objective function value?
A) 925
B) 825
C) 100
D) 92.5
E) none of the above
Answer: A
Page Ref: 130
Topic: Sensitivity Analysis Using Graphs
Difficulty: Easy

11) By how much would the profit contribution of product A has to increase before it will be profitable to produce A?
A) $20
B) $0
C) $1E+30
D) $132.5
E) $10
Answer: E
Page Ref: 130
Topic: Sensitivity Analysis Using Graphs
Difficulty: Easy

12) Suppose that we force the production of one unit of product A. The new objective function value will be
A) $925
B) $915
C) $935
D) $900
E) Not enough information is provided.
Answer: B
Page Ref: 130
Topic: Sensitivity Analysis Using Graphs
Difficulty: Challenging
13) Suppose that the production manager has an additional 100 pounds of material 1. What impact will this have on the

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