#11
Assignment
#5
Sensitivity
Analysis & Parametric Programming Analysis
15
points
Due: March 29
The
Alfred family owns 410 acres of farmland in North Carolina on which they
grow
corn and tobacco. Each acre of
corn costs
$105 to plant, cultivate, and harvest; each acre of tobacco costs
$210. The Alfreds have a budget of $52,500
for
next year. The government limits
the
number of acres of tobacco that can be planted to 100. The profit from each acre of corn is
$300; the
profit from each acre of tobacco is $520.
The Alfreds want to maximize their profit.
a) Define the linear programming model.
b) Solve the model using STORM.
Print a detailed report, a sensitivity analysis and a parametric
programming analysis.
c) The Alfreds have an opportunity to lease some extra land
from a
neighbor. The neighbor is offering
the
land to them for $110 per acre.
Should
the Alfreds lease the land at that price?
What is the maximum price the Alfreds should pay their neighbor for
the
land, and how much should they lease at that price? Explain your answer to the Alfreds.
d) The Alfreds are considering taking out a loan to increase
their
budget. For each dollar they
borrow,
how much additional profit would they make?
If they borrowed an additional $1,000, would the number of acres of
corn
and tobacco they plant change?
Explain
your answer to the Alfreds.
e) Analyze the remaining information on the STORM printouts for
the
Alfreds. (There is a lot of
information
in these reports. Create a clear,
easy
to read and understand report to the Alfreds with sections and section
headings.)