A pair of Trailing Arms requires 3 feet of steel rod stock, 4 rod ends, and 4 hours of labor to machine and assemble.

A Panhard Bar is made using 3 feet of steel rod, 2 rod ends, and 1 hour of labor.

These resources must be arranged for in advance of actual production. For next week, they have available 180 feet of steel rod, 160 rod ends, and 140 labor hours.

College students working part time provide the labor, as needed, for $5/hour.

The correct type of steel rod is available to Widget at $1/foot.

Widget has recently converted their plant from military aerospace work. Their present stock of rod ends are FAA approved MilSpec unobtainium, and were purchased for $1,475.80 each. The same rod ends are readily available through surplus sources for $5.00 apiece.

On the advice of their chief accountant, overhead is charged to all work at $5.00 per direct labor hour.

A pair of Trailing Arms sells for $73.00 FOB Widget, while a Panhard Bar sells for $38.00.

At these prices, they have a stable market slightly exceeding their capacity. In fact, their pricing is so attractive that Blind Hog Motorsports has just signed a contract to purchase 25 pairs of Trailing Arms per week.

As a profit-oriented enterprise, how many of each product ought they make and sell next week?

1. Name the two main decision variables

2. What is the formula for total revenue?

3. Name the four main constraints (other than non-negativity).

4. Which constraint(s) are <=, which are >=?

5. What numbers make uo the Right Hand Sides of the four constraints?

6. What formulas make up the Left Hand Sides of the four constraints?

7. What role does overhead play in this problem?

8. What are the unit costs of the resources that must be paid for?

9 What is the formula for total variable cost?

10. What is the formula for total contribution?

Once you have set up and solved the problem without supplementary variables

and examined the sensitivity analysis, then:

11. Add a column for supplementary variables

12. Change the total cost formula to refer to the supplementary variables

13. Modify the solver setup to include the supplementary variables and the definition constraints

14. Solve the problem with supplementary variables and

15. Compare the two sensitivity analyses.

What happens to profit if you have to start paying the college students $7 per hour?

Turn in a printout of the main page, answer report, and sesnitivity report without supplementary variables. The main page(s) must be printed with grid lones and row/column headers; these are optional for the other pages.

For extra credit also turn in the corresponding pages with supplementary variables. Write a short paragraph on the bottom of the sensitivity report about what happens to profit if you have to start paying the college students $7 per hour.