Cost of raw materials is debited to Raw Materials Inventory when the materials are put into production. bill for the materials is paid. materials are ordered .
By how much would total profit increase if he could increase the number of tons of Material 2 from 10 to 15 tons?The linear model and the sensitivity report given below:Max Z 30X1 + 40X2 = C1: 2X1 + X2 ≤ 40 C2: X1 + 2X2 < 10 C3: 2X1 + X2 ≤ 50 C4: 3X1 + 3X2 ≤ 85 C5: Xi ≥ 0 .
Given that X1 is the number of Product 1 and X2 is the number of Product 2.Total Profit = 30X1 + 40X2To maximize total profit, the value of X1 and X2 should be determined. Given that Gale is offered to purchase 9 tons of Material 2 for $25.00 per ton.
Now, let's determine the total profit by keeping the value of X2 at 10 and then at 15.X2 = 10Maximum value of X1 can be calculated by keeping the value of X2 at 10.2X1 + X2 ≤ 40When X2 = 10, 2X1 ≤ 30So, X1 ≤ 15Maximum value of Z = 30X1 + 40X2= 30(15) + 40(10)=$1050X2 = 15
Maximum value of X1 can be calculated by keeping the value of X2 at 15.2X1 + X2 ≤ 40When X2 = 15, 2X1 ≤ 10So, X1 ≤ 5Maximum value of Z = 30X1 + 40X2= 30(5) + 40(15)=$750 + $600= $1350When the number of tons of Material 2 is increased from 10 to 15 tons, the total profit increases by $300. Answer: 300.