Question: Tifco produces three types of office furniture: chairs, desks and tables. Each item requires time in the fabrication, assembly and shipping departments. The furniture is sold through a distributor who has provided Tifco with demand numbers for each item for the next quarter. The accounting department has provided estimates of profit contribution for each item for the next quarter. The table below summarizes demand, profit and resource requirements for each item.

For purposes of balance in the market, each of the products must make up at least 25% of the total units sold.

1. Assuming Tifco is seeking to maximize profit, provide a complete written LP formulation for this problem.
2. Convert your written formulation into Solver and find the optimal solution with an answer report and generate a sensitivity report.

C) Use only the answer and sensitivity reports to answer the following questions:

Please note: Consider each question below independently. Each question is worth 5 marks.

1. What is the optimal production plan? What are the binding constraints? What is the maximum profit?
2. The distributor has just advised that profit for chairs has increased by $6 chair. What will the effect be upon the solution?
3. The distributor has phoned again to say that an extra 5 tables can be sold. What will be the effect upon the total profit? Can you say anything about the effect upon the production numbers?
4. A new retailer has contracted the company directly and offered a sales plan. If the company will pay an up-front commission of $100, the retailer will take 5 tables – but all 5 must be supplied. Should the company take the deal?

Price: $2.99

Solution: The downloadable solution consists of 5 pages
Deliverable: Word Document