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    Case 2.1 Book

    Uploaded by

    Prejit Radhakrishna
    The document presents an optimization problem to maximize profits from producing two types of cars - Family Thrillseeker Cars and Classy Cruisers Cars. The optimal solution is found to be producing 2120 Family Thrillseeker Cars and 4200 Classy Cruisers Cars for a maximum profit of $26,516,000.

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    © All Rights Reserved
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    Case 2.1 Book

    Uploaded by

    Prejit Radhakrishna
    21 views20 pages
    The document presents an optimization problem to maximize profits from producing two types of cars - Family Thrillseeker Cars and Classy Cruisers Cars. The optimal solution is found to be producing 2120 Family Thrillseeker Cars and 4200 Classy Cruisers Cars for a maximum profit of $26,516,000.

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    © © All Rights Reserved

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    XLSX, PDF, TXT or read online from Scribd

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    The document presents an optimization problem to maximize profits from producing two types of cars - Family Thrillseeker Cars and Classy Cruisers Cars. The optimal solution is found to be producing 2120 Family Thrillseeker Cars and 4200 Classy Cruisers Cars for a maximum profit of $26,516,000.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    21 views20 pages

    Case 2.1 Book

    Uploaded by

    Prejit Radhakrishna
    The document presents an optimization problem to maximize profits from producing two types of cars - Family Thrillseeker Cars and Classy Cruisers Cars. The optimal solution is found to be producing 2120 Family Thrillseeker Cars and 4200 Classy Cruisers Cars for a maximum profit of $26,516,000.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 20

    Case 2.

    1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 6*X1 + 10.5*X2 <= 48000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 <= 3500

    Objective Function

    Maximise Profit 3600*X1 + 5400*X2


    X1 X2
    Profit $3,600.00 $5,400.00

    Solutions

    3800 Family Thrillseeker Car are produced for the optimal maximum profit

    2400 Classy Cruisers Car are produced for the optimal maximum profit
    X1 X2
    3800 2400

    6.00 10.50 48,000.00 48,000.00 <=


    4 2 20,000.00 20,000.00 <=
    2400 3500 <=

    Max Z $ 26,640,000.00
    Case 2.1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 6*X1 + 10.5*X2 <= 48000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 <= 4200

    Objective Function

    Maximise Profit 3600*X1 + 5400*X2


    X1 X2
    Profit $ 3,600 $ 5,400
    Ad $ 500,000

    Conclusion: Advertisement should not be undertaken since there is no quan


    optimal solution, with the addition of advertisement which is reducing the pr
    X1 X2
    3800 2400

    6.00 10.50 48,000.00 48,000.00 <=


    4 2 20,000.00 20,000.00 <=
    2400 4200 <=

    Max Z $ 26,140,000.00

    here is no quantity increase of Classy Cruiser, for


    reducing the profit
    Case 2.1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 6*X1 + 10.5*X2 <= 60000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 <= 3500

    Objective Function

    Maximise Profit 3600*X1 + 5400*X2


    X1 X2
    Profit $3,600.00 $5,400.00

    Solutions

    3250 Family Thrillseeker Car are produced for the optimal maximum profit

    3500 Classy Cruisers Car are produced for the optimal maximum profit
    X1 X2
    3250 3500

    6.00 10.50 56,250.00 60,000.00 <=


    4 2 20,000.00 20,000.00 <=
    3500 3500 <=

    Max Z $ 30,600,000.00
    With overtime the company earns a profit of $30,600,000 but without overtime the comp
    $26,640,000. Since overtime comes with a price, Rachel should be willing to pay at most
    profits for overtime costs, i.e. at most $3,960,000.
    overtime the company earns a profit of
    ing to pay at most the difference in these two
    Case 2.1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 6*X1 + 10.5*X2 <= 60000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 <= 4200

    Objective Function

    Maximise Profit 3600*X1 + 5400*X2


    X1 X2
    Profit $3,600.00 $5,400.00

    Solutions

    3000 Family Thrillseeker Car are produced for the optimal maximum profit

    4000 Classy Cruisers Car are produced for the optimal maximum profit
    X1 X2
    3000 4000

    6.00 10.50 60,000.00 60,000.00 <=


    4 2 20,000.00 20,000.00 <=
    4000 4200 <=

    Max Z $ 32,400,000.00
    Case 2.1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 6*X1 + 10.5*X2 <= 60000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 <= 4200

    Objective Function

    Maximise Profit 3600*X1 + 5400*X2


    X1 X2
    Profit $3,600.00 $5,400.00

    Solutions

    3000 Family Thrillseeker Car are produced for the optimal maximum profit

    4000 Classy Cruisers Car are produced for the optimal maximum profit

    Solution in e) is wiser compared to a) because of increased profit

    If Rachel uses the advertising campaign and the overtime labor, then the profit will be $3
    campaign nor overtime labor, the profit will be $26,640,000. If Rachel uses just the camp
    If Rachel uses just overtime labor, the profit will be $29,000,000. Thus Rachel should cho
    and the overtime labor.
    X1 X2
    3000 4000

    6.00 10.50 60,000.00 60,000.00 <=


    4 2 20,000.00 20,000.00 <=
    4000 4200 <=

    Max Z $ 30,300,000.00

    the profit will be $30,300,000. If Rachel uses neither the


    uses just the campaign, the profit will be $26,140,000.
    s Rachel should choose to use the advertising campaign
    Case 2.1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 6*X1 + 10.5*X2 <= 48000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 <= 3500

    Objective Function

    Maximise Profit 2800*X1 + 5400*X2


    X1 X2
    Profit $2,800.00 $5,400.00

    Solutions

    1875 Family Thrillseeker Car are produced for the optimal maximum profit

    3500 Classy Cruisers Car are produced for the optimal maximum profit
    X1 X2
    1875 3500

    6.00 10.50 48,000.00 48,000.00 <=


    4 2 14,500.00 20,000.00 <=
    3500 3500 <=

    Max Z $ 24,150,000.00
    Case 2.1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 7.5*X1 + 10.5*X2 <= 48000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 <= 3500

    Objective Function

    Maximise Profit 3600*X1 + 5400*X2


    X1 X2
    Profit $3,600.00 $5,400.00

    Solutions

    1500 Family Thrillseeker Car are produced for the optimal maximum profit

    3500 Classy Cruisers Car are produced for the optimal maximum profit
    X1 X2
    1500 3500

    7.50 10.50 48,000.00 48,000.00 <=


    4 2 13,000.00 20,000.00 <=
    3500 3500 <=

    Max Z $ 24,300,000.00
    Case 2.1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 6*X1 + 10.5*X2 <= 48000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 = 3500

    Objective Function

    Maximise Profit 3600*X1 + 5400*X2


    X1 X2
    Profit $3,600.00 $5,400.00

    Solutions

    1875 Family Thrillseeker Car are produced for the optimal maximum profit

    3500 Classy Cruisers Car are produced for the optimal maximum profit

    Profit is decreased by US$ 990,000/- compared to a)

    In this case 1875 Family Thrillseekers and 3500 (of course) Classy Cruisers should be asse
    $25,650,000. Now, the profit found in Part a) was $26,640,000 and when we subtract this
    $990,000. This difference is less than $2,000,000 and so Rachel should meet the full dem
    X1 X2
    1875 3500

    6.00 10.50 48,000.00 48,000.00 <=


    4 2 14,500.00 20,000.00 <=
    3500 3500 =

    Max Z $ 25,650,000.00

    $ (990,000.00)

    isers should be assembled for a maximum profit of


    en we subtract this new profit we get a difference of
    d meet the full demand of the Classy Cruisers.
    Case 2.1 Auto Assembly

    Decision Variables

    X1 No. of Family Thrillseeker Car


    X2 No. of Classy Cruisers Car

    Constraints

    Labour Hours 7.5*X1 + 10.5*X2 <= 60000


    No. of Doors 4*X1 + 2*X2 <= 20000
    Demand of X2 X2 <= 4200

    Objective Function

    Maximise Profit 2800*X1 + 5400*X2


    X1 X2
    Profit $2,800.00 $5,400.00

    Solutions

    2120 Family Thrillseeker Car are produced for the optimal maximum profit

    4200 Classy Cruisers Car are produced for the optimal maximum profit
    X1 X2
    2120 4200

    7.50 10.50 60,000.00 60,000.00 <=


    4 2 16,880.00 20,000.00 <=
    4200 4200 <=

    Max Z $ 26,516,000.00

    $ (124,000.00)

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