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LP Problem

Taco Loco is evaluating three new products (X, Y, Z) based on their profit potential and raw material availability. A linear programming model was formulated to maximize profit, resulting in an optimal mix of Y and Z, while X is not produced. The sensitivity report indicates that increasing the price of Y and reducing the price of X could shift demand, and the binding constraints are beef and cheese, while beans have slack.

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Shahrukh Shahriar Hossain
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2 views1 page

LP Problem

Taco Loco is evaluating three new products (X, Y, Z) based on their profit potential and raw material availability. A linear programming model was formulated to maximize profit, resulting in an optimal mix of Y and Z, while X is not produced. The sensitivity report indicates that increasing the price of Y and reducing the price of X could shift demand, and the binding constraints are beef and cheese, while beans have slack.

Uploaded by

Shahrukh Shahriar Hossain
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Raw-Materials (lbs) Products Availability

Taco Loco is considering a new addition to their


X Y Z
menu. They have test marketed a few possibilities
and narrowed them down to three new products, X, Beef 4 3 2 28
Y, and Z. Each of these products is made from a Cheese 11 8 9 80
different combination of beef, beans, and cheese, and Beans 2 4 4 68
each product has a price point. Taco Loco feels they can earn profit from an X $17, a Y $13, and a Z $14.
To produce this product the requirements and availability of raw-materials are shown in the table.
1. As a MIS consultant of the company formulates the following linear programming model.
Objective Function: Max R = 14Z + 13Y + 17X; subject to: (i) Beef 2Z + 3Y + 4X ≤ 28 (ii) Cheese
9Z + 8Y + 11X ≤ 80 (iii) Beans 4Z + 4Y + 2X ≤ 68 (iv) X,Y,Z ≥ 0
2. Solve the model using appropriate software and interpret the report
The sensitivity report from the computer model reads as follows:

# Question Answer
1 The optimum mixture of the product X=00, Y=8.36 and
Z=1.45
2 Total profit at this mix
3 What value of objective function would include X in the optimum mix 17.818
4 Objective coefficient will not change the optimum value of Z 14-5.33 to 14+.63
5 If Z is increased by 1 unit what will be the ultimate effect on profit No effect
6 If x is increased by 1 unit what will be the ultimate effect on profit Profit will reduce by
.818
7 Taco Loco should try to purchase additional _ but should not buy more_ . beef and cheese, beans
8 Taco Loco should produce both ___ but should not make any ___. Z and Y, X
9 Taco Loco will make the same quantity of X, Y, and Z if the amount 74.67, 126
of cheese at their disposal is between __ pounds and __ pounds.
10 For humanitarian reasons, Taco Loco decides they would rather make 82 cents (81.8 cents)
product X than product Y. The dollar amount that they can both increase
the price of Y and reduce the price of X by to accomplish this reversal of
demand is ________.
11 If Taco Loco reduces the price of the X product by about 82 cents, then 0 units (none)
their optimal product mix will contain ________ X.
12 Which constraint(s) is/ are binding? Beef and Cheese
Which constraint(s) is/ are slack(s)? Beans

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