16.2.3 Exploration 16B: Sensitivity Analysis

In this exploration, we will learn a little about ”Sensitivity analysis”. We’ll use the example of producing chairs, tables, and juice carts (Examples 1, 2 and 4) and see how the optimal solution changes as we adjust the information about costs and labor hours. Use the file C16 Furniture2.xls [.rda]. Each of the following scenarios is a slight modification to the existing data; simply change the numbers from the original values and run the solver routine to see what happens. Summarize your results in the tables provided.

Scenario A.

It is probably not realistic to assume that each and every chair is assembled in 1 hour. Suppose your assembly crews are a little faster (0.9 assembly hours per chair) or a little slower (1.1 assembly hours per chair). How does the optimal solution change?

Scenario B.

The market probably changes a little, resulting in slight differences in actual selling prices for the products. What happens if the selling price of juice carts fluctuates between $35 and $37?

Scenario C.

Just as your selling prices fluctuate, you should expect your material costs to change slightly. Explore what happens if the material cost for the tables is between $14 and $16.

Scenario D.

Suppose the union demands that the workers in the assembly portion get higher wages. Explore what happens if the wages are raised from $4 to $5 or $6 per hour of assembly work.