ADM2302 Assignment # 2 Summer 2017 Page 1 Assignment # 2 Linear Programing Formulation and Sensitivity Analysis ADM2302 students are reminded that submitted assignments must be neat, readable, and well-organized. Assignment marks will be adjusted for sloppiness, poor grammar and spelling, as well as for technical errors. This assignment is to be done individually; plagiarism on assignments will not be accepted. This assignment can NOT be hand written. The assignment is to be submitted electronically as a single Word document file by Wednesday June 7th prior to 23:59. Front page of the word document has to include title of the assignment, course code and section, student name and student number. For Excel solving method, please use Simplex LP method. Problem 1: (16 points) A renowned Norwegian toymaker is preparing for the holiday season. It produces two kinds of toys: toy police cars and fire trucks. For the production, the company utilizes two raw material, wood and plastic and possesses 26000 kg and 36000 kg respectively of raw material for its monthly production. The quantities of raw material needed to build each toy are presented in the table below: Raw material Quantity required Police car (kg) Fire truck (kg) Wood 2 4 Plastic 6 3 The fabrication time required to produce a fire truck is three times as long as what is required to produce a police car. The total production capacity (for both toys) is equivalent to producing 6000 fire trucks. For technical reasons, we must produce at least twice as many more police cars than fire trucks. The unit contribution for each toy is as follows: 20$ per police cars and 25$ per fire trucks. 1. Formulate algebraically the LP problem that provides the optimal solution to help the company prepare for the holiday season. (11 points) 2. Find the optimal schedule that maximizes profits using Solver (Provide a printout of the corresponding “Excel Spreadsheet” and the “Answer Report”). Include “managerial statements” that communicate the results of the analyses (i.e. describe verbally the results). (3 points) 3. The company has the opportunity to hire a contractor that would allow the total production capacity to increase by 10% for a cost of 5000$ per month. Should the company hire the contractor? Justify. (2 points)