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In the product mix example in this chapter, Quick-Screen is considering adding some extra operators who...

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Statistics

In the product mix example in this chapter, Quick-Screen isconsidering adding some extra operators who would reduce processingtimes for each of the four clothing items by 10%. This would alsoincrease the cost of each item by 10% and thus reduce unit profitsby this same amount (because an increase in selling price would notbe possible). Can this type of sensitivity analysis be evaluatedusing only original solution output, or will the model need to besolved again? Should Quick-Screen undertake this alternative? Inthis problem, the profit per shirt is computed from the sellingprice less fixed and variable costs. The computer solution outputshows the shadow price for T-shirts to be $4.11. If Quick-Screendecided to acquire extra T-shirts, could the company expect to earnan additional $4.11 for each extra T-shirt it acquires above 500,up to the sensitivity range limit of T-shirts?

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