Operation Management-QA68

Operation Management-QA68 Online Services

 

Linear Programming and Sensitivity Analysis

 
Sensitivity Analysis

     

  1. Walling Street Investments, Inc., is a brokerage firm that manages stock portfolios for a number of clients. A particular portfolio consists of P shares of Petroleum Inc. and Q shares of Quality Steel. The annual return for Petroleum Inc is $5 per share and the annual return for Quality Steel is $8 per share. Each Petroleum Inc share sells for $30 per share and Quality Steel sells for $55 per share. The portfolio has $100,000 to be invested. The portfolio risk index (0.65 per share of Petroleum Inc and 0.30 per share for Quality Steel) has a maximum of 800. In addition, the portfolio is limited to a maximum of 800 shares of Petroleum Inc. The linear programming formulation that will maximize the total annual return of the portfolio is as follows

    2.  

Max     5P + 8Q                                   Maximize total annual return

s.t.

30P + 55Q       ≤ 100,000        Funds available

0.65P + 0.30Q ≤ 800               Risk maximum

1P                    ≤ 800               Petroleum Inc. maximum

P, Q      ≥ 0
 
The computer solution of this problem is shown in the following figure.
 

  1. What is the optimal solution, and what is the value of the total annual return?
  2. Which constraints are binding? What is your interpretation of these constraints in terms of the problem?
  3. What are the dual values (shadow prices) for the constraints? Interpret each.
  4. Would it be beneficial to increase the maximum amount invested in Petroleum Inc.? Why or why not?

 

     

  1. Salsa Aguilar, located in Pennsylvania, produces salsas that are sold through Heisler’s Market, a local grocery store located in McMurray, PA. Salsa Aguilar makes two types of products: Traditional Salsa and Spicy Salsa. Essentially, the two products have different blends of whole tomatoes, tomato sauce, and onion puree.The Traditional Salsa is a blend of 50% whole tomatoes, 40% tomato sauce, and 10% chopped onions and jalapenos. The Spicy Salsa, has a thicker and chunkier consistency, consists of 70% whole tomatoes, 10% tomato sauce, and 20% chopped onions and jalapenos. Each jar of salsa produced weighs 12 ounces. For the current production period, Salsa Aguilar can purchase up to 200 pounds of whole tomatoes, 150 pounds of tomato sauce, and 85 pounds of chopped onions and jalapenos; the price per pound for these ingredients is $0.95, $0.70, and $0.55, respectively. The cost of the spices and the other ingredients is approximately $0.15 per jar. Salsa Aguilar buys empty glass jars for $0.03 each, and labeling and filling costs are estimated to be $0.02 for each jar of salsa produced. Salsa Aguilar’s contract with Heisler’s Market results in sales revenue of $2.00 for each jar of Traditional Salsa and $2.25 for each jar of Spicy Salsa. Letting

 
T = jars of Traditional Salsa

S = jars of Spicy Salsa
 
Leads to the formulation of the linear program as follows. Note that we adjusted the weights of the ingredients to accommodate for the 12 oz jars of salsa and used their prices to find the values below
 
Max     2T + 2.25S

s.t.

5T + 7S                       ≤ 2533             Whole tomatoes

4T + 1S                       ≤ 1400             Tomato Sauce

1T + 2S                       ≤ 7333             Chopped Onions and jalapenos

T, S                       ≥ 0
 
The computer solution is shown in figure below.

 

  1. What is the optimal solution, and what are the total returns based on these optimal production quantities?
  2. Specify the objective function ranges
  3. What are the dual values (shadow prices) for each constraint? Interpret each.
  4. Identify each of the right-hand-side ranges.

 
You can read more about our case study assignment help services here.
 

How it Works

How It works ?

Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention Case Id mentioned in end of every Q&A Page. You can also send us your details through our email id support@assignmentconsultancy.com with Case Id in the email body. Case Id is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.

Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to Case Id . The date is asked to provide deadline.

Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id assignmentconsultancy.help@gmail.com and support@assignmentconcultancy.com must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.

Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.

Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.

Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.

Case Approach

Scientific Methodology

We use best scientific approach to solve case study as recommended and designed by best professors and experts in the World. The approach followed by our experts are given below:

Defining Problem

The first step in solving any case study analysis is to define its problem carefully. In order to do this step, our experts read the case two three times so as to define problem carefully and accurately. This step acts as a base and help in building the structure in next steps.

Structure Definition

The second step is to define structure to solve the case. Different cases has different requirements and so as the structure. Our experts understand this and follow student;s university guidelines to come out with best structure so that student will receive best mark for the same.

Research and Analysis

This is the most important step which actually defines the strength of any case analysis. In order to provide best case analysis, our experts not only refer case materials but also outside materials if required to come out with best analysis for the case.

Conclusion & Recommendations

A weak conclusion or recommendations spoil the entire case analysis. Our expert know this and always provide good chunks of volume for this part so that instructors will see the effort put by students in arriving at solution so as to provide best mark.

Related Services

 

     

  1. Intel Investments, Inc. manages funds for a number of companies and wealthy clients. The investment strategy is tailored to each client’s needs. For a new client, Intel has been authorized to invest up to $1 million in two investment funds: a high-risk stock fund and a low-risk money market fund. Each unit of the stock fund costs $100 and provides an annual rate of return of 15%; each unit of the money market fund costs $150 and provides an annual rate of return of 4%. The client is content with minimizing risk subject to the requirement that the annual income from the investment be at least $80,000. According to Intel’s risk measurement system, each unit invested in the stock fund has a risk index of 10, and each unit invested in the money market fund has a risk index of 4. Intel’s client also specified that at least $250,000 has to be invested in the money market fund. Letting,

 
S = units purchased in the stock fund

M = units purchased in the money market fund

Leads to the following formulation

Min      10S + 4M

s.t.

100S + 150M  ≤ 1,000,000                 Funds available

15S    + 4M     ≥ 80,000                      Annual Income

M         ≥ 250,000/150             Units in money market

S,M     ≥ 0
 
The computer solution is shown below

 

     

  1. Suppose the risk index for the stock fund (the value of S) increases from its current value of 10 to 12. How does the optimal solution change, if at all?
  2. Suppose the risk index for the money market fund (the value of M) increases from its current value of 4 to 6. How does the optimal solution change, if at all?
  3. Suppose S increases to 12 and M increases to 6. How does the optimal solution change, if at all?

 

product code: Operation Management-QA68
 
Looking foe best Operation Management-QA68 online,please click here
 

Summary