Problem formulation:
The company wants to increase the availabel sortiment from 2types of glasses to 3 types. A production
line already produces 2 different types of glasses: 6oz juiceglasses and 10oz cocktail glasses and 8oz
champagne glass. Adding a new type is possible but you as amanager should check that it will be cost
effective. The production line can produce 100 cases of 6ozglasses in 6 hours and 100 cases of 10oz glasses
in 5 hours. The production time for the new type, a champagneglass, is 8 hours per 100 cases. A manager
needs to optimize the production while she prefers to operatethe line on a schedule of 60 hours per week.
The product is stored in factory’s storage room with thecapacity of 15000 cubic feet. A case of 6oz glasses
requires 10 cubic feet and a case of 10oz glasses requires 20cubic feet. A case of the 8oz champagne glass
requires 10 cuft. A retail customer will buy 6oz glasses for$5.00 per case but can accept only 800 cases per
week and 10oz glasses for $4.50 per case, and 8oz glasses for$6.00 per case and there is no limit on the size
of the order for these two types.
Tasks:
1.Find how how many cases of each type of glass should beproduced each week in order to
maximize the profit ?
Note: In the report display the optimal solution and theobjective function value clearly in a form of
a table.
2. Is including a new type of glass (the champagne glass)economically attractive ?
3. Determine shadow prices summarize them in a table andassociate correct units with them.
4. If you divert resources to produce extra one hundred casesof 8oz champagne glasses how
much would the profit change ? (this quantity is calledreduced cost).
