Problem 2 The AB manufacturing company has two kinds of products: A and B. They earn $180 profit for each Product A and $90 profit for each Product B. To produce Products A and B, the company needs three resources: Q, R, S. Each unit of Product A consumes 6 units of Resource Q and 2 units of Resource R. Each unit of Product B consumes 8 units of Resource Q and 3 units of Resource S. The AB manufacturing company only can use 48 units of Q, 12 units of R and 12 units of S per day. Resource Q Ꭱ S Profit per unit Product A Product B Resource Available 6 2 0 180 8 0 3 90 48 12 12 1. Formulate a linear program and use the simplex algorithm to solve it. 2. Write down a linear programming model to determine the minimum total amount the insur- ance company should pay to AB manufacturing when they lose all the available resource. (Hint: consider the relationship between this LP for the insurance company and the original LP for the AB company). 3. What are the shadow prices for each resource? Which is the most "scarce" resource for AB manufacturing?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter4: Linear Programming Models
Section: Chapter Questions
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Problem 2 The AB manufacturing company has two kinds of products: A and B. They earn
$180 profit for each Product A and $90 profit for each Product B. To produce Products A and B,
the company needs three resources: Q, R, S. Each unit of Product A consumes 6 units of Resource
Q and 2 units of Resource R. Each unit of Product B consumes 8 units of Resource Q and 3 units
of Resource S. The AB manufacturing company only can use 48 units of Q, 12 units of R and 12
units of S per day.
Resource
Ꭱ
S
Profit per unit
Product A
6
2
0
180
Product B Resource Available
∞
0
3
90
48
12
12
1. Formulate a linear program and use the simplex algorithm to solve it.
2. Write down a linear programming model to determine the minimum total amount the insur-
ance company should pay to AB manufacturing when they lose all the available resource.
(Hint: consider the relationship between this LP for the insurance company and the original
LP for the AB company).
3. What are the shadow prices for each resource? Which is the most "scarce" resource for AB
manufacturing?
Transcribed Image Text:Problem 2 The AB manufacturing company has two kinds of products: A and B. They earn $180 profit for each Product A and $90 profit for each Product B. To produce Products A and B, the company needs three resources: Q, R, S. Each unit of Product A consumes 6 units of Resource Q and 2 units of Resource R. Each unit of Product B consumes 8 units of Resource Q and 3 units of Resource S. The AB manufacturing company only can use 48 units of Q, 12 units of R and 12 units of S per day. Resource Ꭱ S Profit per unit Product A 6 2 0 180 Product B Resource Available ∞ 0 3 90 48 12 12 1. Formulate a linear program and use the simplex algorithm to solve it. 2. Write down a linear programming model to determine the minimum total amount the insur- ance company should pay to AB manufacturing when they lose all the available resource. (Hint: consider the relationship between this LP for the insurance company and the original LP for the AB company). 3. What are the shadow prices for each resource? Which is the most "scarce" resource for AB manufacturing?
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Cengage,