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Colorado Technical University MATH 451 math 451 pricing out new variables Using the __________, the exact impact of the loss of resources from the existing products can be calculated. profit cont ... ribution objective function value Solver Report shadow prices Unit D Requirements: Allowable Increase Shadow Price Unit Price Part 1 3 150 $2.1 $3 Part 2 2 125 $1.3 $5 Assembly Time 1 100 $2.5 $10 Question 2 The minimum selling price for Unit D is __________. 3(2.1 + 3) + 2(1.3 + 5) + 2.5(10) 40.4 $40.40 $17.60 Question 3 If the company produces 50 of Unit D, their profit will be reduced __________. $13.00 $6.20 $31.00 $30.00 Pricing out determines the __________ price for the product. highest minimum maximum average For a product to be viable, it must have which of the following? Shadow prices of the resources used higher than the selling price Less resources than the other products A selling price at least as high as the worth of the resources used by that product A total worth of the resources higher than the selling price A proposed product would use 2 units of resource A, which has an allowable increase of 400 and 1 unit of resource B, which has an allowable increase of 200 units. How would the calculation be made for the 100% rule? (2 / 400) + (1 / 200) (2 / 400) / (1 / 200) (2 / 400) × (1 / 200) (2 + 1) × (400 + 200) The worth of the resources needed by the new product is __________. The product of the resources used multiplied by the sum of their shadow prices The sum of the shadow prices of the resources used for that product The sum of the number of each resource multiplied by the allowable change of that resource The sum of the number of each resource used multiplied by the shadow price of that resource The changes required for the new product are tested for validity using which of the following? Just the shadow prices of the resources to be used The 100% rule Just the right-hand side (RHS) values of the constraints Just the allowable changes in the resources to be used In the Pricing Out procedure, resources __________. must be more than those measured by the 100% rule must be able to be diverted from other resources in a worthwhile way must be the same as those used by the other products must have allowable changes in resource usage that are not infinite Question 1 The profit for the company will be reduced by $2.60 for each __________ produced. Unit A Unit D Unit B Unit C Which of the following question is to be considered in a pricing out study? What is the maximum price for the product to make it a viable product? Will the product be profitable to produce? Are there enough resources to produce the product? Is the cost of the product higher than that of other products? The changes required for the new product are tested for validity using which of the following? Just the shadow prices of the resources to be used Just the allowable changes in the resources to be used The 100% rule Just the right-hand side (RHS) values of the constraints Using the __________, the exact impact of the loss of resources from the existing products can be calculated. profit contribution shadow prices objective function value Solver Report To show the shadow prices are valid, the __________ is checked. sensitivity analysis objective function value Solver Report 100% Rule A positive reduced cost indicates the total cost will __________ if the product is produced. not change reduce decrease rise The worth of the resources needed by the new product is __________. The product of the resources used multiplied by the sum of their shadow prices The sum of the number of each resource multiplied by the allowable change of that resource The sum of the shadow prices of the resources used for that product The sum of the number of each resource used multiplied by the shadow price of that resource In using the 100% rule, what is compared? The requirements of resources of the new product and the allowable changes in those resources The requirements of resources of the new product and the RHS constraints of those resources The requirements of resources of the new product and the selling price of the new product The requirements of resources of the new product and the unit costs of those resources A company is considering the addition of product D with a worth of resources of $11.00 and a cost to produce of $27.00, if the marketing company suggested selling price is $35, you would decide to __________. add product D and sell it at $40.00 add product D because the two selling prices are close not produce product D because the suggested selling price is less than the minimum selling price add product D and sell product D for $35 In pricing out a proposed new product, which of the following steps is required? Calculate the reduction of resources available for the existing products. Establish new constraints for all of the products. Determine the selling prices of all of the products. Determine the worth of the resources needed by the new product. Which of the following is a step to the pricing out procedure? Calculate the minimum selling price for the new product. Compare prices of the existing products with that of the new product. Calculate the maximum selling price for the new product. Calculate the actual demand for the new product. Unit D Requirements: Allowable Increase Shadow Price Unit Price Part 1 3 150 $2.1 $3 Part 2 2 125 $1.3 $5 Assembly Time 1 100 $2.5 $10 Question 4 The actual costs for the resources of the new product D are __________. $900 $29 (3 + 2 + 1) * (3 + 5 + 10) 29 The difference between the marginal contribution to the objective function value from the inclusion of a decision variable and the marginal worth of the resources it consumes is the __________. shadow price allowable decrease surplus reduced cost Which of the following defines pricing out? The impact of going outside the allowable change in a product's objective function coefficient (OFC) The study of an organization's existing product mix The study of the impact of a new decision variable for an organization Setting a price an organization is will to pay for a resource The addition of a new product will be recommended only if it is profitable to the company to __________ resources from the current production. increase decrease expand redirect The minimum selling price is the __________ of the cost to make the product and the worth of the resources diverted from existing products. total difference product variance Pricing out analyzes the impact of __________ to the existing LP model. changes to a decision variable a new decision variable removing a variable removing a decision variable For a proposed product to be viable, using the pricing out procedure, the final result must be __________. a selling price greater than or equal to the worth of the resource that the usage of resources must not exceed the right-hand side (RHS) values of the constraints a selling price in line with the selling prices of the other products a 100% rule calculation in which the result is greater than 1 11 Unit D Requirement s: Allowable Increase Shadow Price Part 1 3 150 $2.1 Part 2 2 125 $1.3 Assembly Time 1 100 $2.5 Question 11 The required profits contribution for the new product of Unit D is __________. 3 * 2.1 + 2 * 1.3 * 1 * 2.5 $11.00 $11.40 11.4 [Show More]

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