Management Science

1375 WordsMar 17, 20136 Pages
Introduction: The Scottsville Textile Mill produces five different fabrics. Each fabric can be woven on one or more of the mill’s 38 looms. The sales department’s forecast of demand for the next month is shown below, along with data on the selling price per yard, variable cost per yard and the purchase price per yard. The mill operates 24 hours a day and is scheduled to work 30 days during the coming month. Monthly Demand, Selling Price, Variable Cost, and Purchase Price Data for the Scottsville Textile Fabric Demand (yards) Selling Price ($/yard) Variable Cost ($/yard) Purchase Price ($/yard) 1 16,500 0.99 0.66 0.80 2 22,000 0.86 0.55 0.70 3 62,000 1.10 0.49 0.60 4 7,500 1.24 0.51 0.70 5 62,000 0.70 0.50 0.70…show more content…
The addition of a 9th dobbie loom would provide an additional $472.25. We do not feel that this is a significant enough increase in Profit Margin to take on the additional risk of maintenance and possible additional costs associated with taking on an additional loom. Let alone the additional cost of purchasing the loom. Question 4: A discussion of the objective coefficients ranges: A shorter range indicates a more sensitive variable (concerning the objective function coefficients). The shortest ranges we found was that of the Qty of Fabric 1 manufactured on dobbie and also the Qty of Fabric 1 purchased. This indicated that these variables are most sensitive to change. This is evident as shown in the addition of a 9th dobbie loom. Note that the overall Profit margin did not increase significantly. However, the Qty of Fabric 1 manufactured on the dobbie loom and purchased varied drastically between the 8 dobbie loom run and the 9 dobbie loom run. Question 5: A discussion of how the objective of minimizing total costs would provide a different model than the objective of maximizing total profit contribution. (How would the interpretation of the objective coefficients’ ranges differ for these two models?): We were able to easily manipulate the linear program to calculate the objective of minimizing the total costs. To do this, we modified the Maximize solution to reflect the Sum of the (Qty of each fabric on each machine *
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