Question: Figure shows the Solver sensitivity report for Valencia Products in Problem. Using only the information in the sensitivity report, answer the following questions.
a. Explain why the reduced cost for SpeedBuster is 0.
b. If the unit profit for SpeedBuster is decreased to $35, can you predict how the optimal solution and profit will change?
Problem: Valencia Products makes automobile radar detectors and assembles two models: LaserStop and SpeedBuster. The firm can sell all it produces. Both models use the same electronic components. Two of these can be obtained only from a single supplier. For the next month, the supply of these is limited to 4,000 of component A and 3,500 of component B. The number of each component required for each product and the profit per unit are given in the table.
a. If the unit profit for LaserStop is increased to $64, can you predict how the optimal solution and profit will change?
b. If an additional 500 units of component A are available, can you predict how the optimal solution and profit will be affected?
c. If a supplier delay results in only 3,400 units of component B available, can your predict how the optimal solution and profit will be affected?
Components
Required/Unit
A B Profit/Unit
LaserStop 18 6 $12
SpeedBuster 12 10 $40
d. Identify the decision variables, objective function, and constraints in simple verbal statements.
e. Mathematically formulate a linear optimization model.