 Hello everyone. I hope you're doing well. I hope you're staying safe during this hurricane as it kind of runs through us However, you know Since we are obviously not in class today I wanted to go ahead and sort of run through the next part what we would be doing in class If you came in so quite literally when you came into class I'm expecting that this was done Because this is what we're going to talk about if you had not done this I would have quite literally just told you to Watch the video effectively, so what I want to go ahead and do is I want to go ahead and Start talking about some of the values inside of our sensitivity report So one of the things that you're noticing at least up in this top region for now is our final values This 25 in this 50 if you notice This was the value that Excel put into our normal and racing lawnmowers. So effectively, that's just our changing function, right? That's that is The same value the same things going on with our objective coefficient, you see our 600 and our 800 Those are the same things as our profits. So For my sake, I'm going to go ahead and highlight those as green This is just sort of following our color scheme, but I want to focus in we'll ignore reduced costs for now We'll get into that in a little bit or in later semesters classes What I want to focus in on though is the allowable increase and decrease Values you see what these are referring to is, you know, what if I wanted to Make a little more money. What if I wanted to increase this cost? How much could I increase say my normal lawnmower? Without breaking this entire model remember where this entire approach using solver and using linear Programming was to find the optimal Combination what this is saying is to maintain This model I could increase my profits. I could increase the profit of my racing lawnmower To 600 plus 200 $800 I could increase it to 800 before everything breaks as soon as I do that I'll we'll see that so just to even see this in action for a second I'm going to go ahead and say I'm increasing my profit my normal lawnmowers To 799 dollars that's literally how much I'm going to increase This if I ran through the solver one more time What you'd notice is nothing changed and that's actually what we're kind of identifying is that I could increase the selling price of my normal lawnmower up to $200 and Still have the same models and this it would still be the optimal configuration And this is how much I would make the second I increase this to 800 dollars, right? I want you know, I'm I'm jonesen for that extra dollar The second I do that and I run through this entire process. I've broken my model You see now it's just more optimal to you make normal lawnmowers because they take less labor hours and you know Well, you know tubing is just kind of part of it as well. It's just Better to do this so we don't you know want that obviously like when we're thinking about things. Maybe we have some constraints about We need to make at least two racing lawnmowers or you know half the number of normal lawnmowers something you'll do in the next assignment So that's effectively again our Allowable increase we can make a max profit You can imagine the exact same thing happens with allowable decrease if I wanted to minimize profit for whatever I You know cuz you know, I wanted to not make as much money Right, it would be instead the objective coefficient minus the allowable decrease Now for my sake, you know, I won't change this to a dollar sign amount, but this is still an indication, you know, I can Contain I can still use my model if instead I put it at five thirty four five hundred thirty four dollars would be my selling point I run the solver Again, nothing changes because even with all of these configurations. This is still the optimal Selling kind of value. This is the optimal amount to sell So again, I'm gonna just Cancel out of that and we'll bring it back to six hundred The same thing happens as you can guess with both With the racing lawnmower and it's allowable increase and decrease now my sake I'm gonna not type them out I'm actually just going to highlight and use that tiny little square To drag it down that didn't work try it again practice a little bit, you know Learn some fun little Excel foo if you will so With that kind of in mind, I'll go ahead and just give these a nice little highlight as well For orange and since we didn't do this for racing lawnmowers. Go ahead, you know Do it, right? Well, I want to focus in on though is now this bottom section our constraints So we see the same kind of concept. These are those final values that we ended up seeing here 75 2013 hundred same values going on so I'm just gonna go ahead and highlight those in blue The one thing I want you to kind of realize is that you know to maximize and find the optimal selling and optimal profit and whatnot We used up all of our Engines we used up all of our labor hours, but one of those interesting points is we had a limit of three thousand Feet of to be right That's too much. We actually have we're buying if you think about this in the supply chain model We're buying too much tubing. We're only using thirteen hundred tubing to maximize profit So if we're looking to cut costs somewhere, this would be a great place to do that We could actually reduce this down to Literally fifteen hundred, you know just a little slack for when we break it and we'd still be perfectly fine So that's one of those interesting points. We found a place to save money Another point is these shadow costs. So the entire concept of a shadow cost, right? Is what happens if I increase this by one? If I said that I am going to allow, you know, I'm gonna open up another assembly line for creating engines, right? What would I? boom What would be my now optimal? Profit or change what would change through this entire process the shadow price is saying that if I increased my engines by one I would make an increased profit of two hundred dollars and Let's actually go ahead and see that I'm gonna go through. I'm gonna run the solver I've increased my constraint that I'm allowed to make one more engine and we see exactly that we see This time. I'm allowed now 200 Dollars additional profit exactly like it said now you can see increasing tubing doesn't do anything for us because again We have so much tubing left over. So, you know, it's not gonna help us The one thing I want you to kind of look at is this labor hours now It doesn't seem like much right, you know two twenty dollars doesn't seem like much And if I were to ask you which one you should increase you'd say oh engines obviously we make more money, but What I want to kind of pose the question is should we make one more engine or Hire one more person Reason why is because if we think about it. We hire a full-time person. They're gonna be working 40 hours. That's a Very key thing here. We're gonna add one more person. They're working 40 hours a week on creating these lawnmowers What we're looking at is now again if we think about it increasing by one gives us a profit profit of $20 If we hired someone in their job 40 hour work week That's increasing now by 40, you know, I'm using air quotes here, but units 40 additional hours means 40 times 20. We should see an increase of $800 and just to see that again, I'm gonna go ahead and make our constraints again 75 here and We're gonna increase our limits now again. We've hired one more person So we have an additional 40 hours of work week again Just increasing that engine. We got a 200 profit We hire someone instead we hire a new person we're gonna get a profit of $800 So it's a fun little kind of idea of which variables should we be changing which variables should we be? Fluctuating with so the thing about it again These are those same constraints that we are talking about you see the 3000 there So again, I'll just highlight those in red. We'll worry about the allowable increase and decrease later So we're gonna go ahead and I'm just gonna black them out again, you know things to think about But this is an interesting kind of point so one of the things to think about if you're looking at this for You know prepping the exam because obviously this will be something on the exam if I presented you with this sensitivity report, right? if I asked you what the max profit of a Normal lawnmower or the min profit of a racing lawnmower Was or how many engines were used to create our optimal profit? You know every single one of these cells is something that you can expect to be asked These are not because that's why I blacked them out reduced cost same kind of thing Everything that is not blacked out here is a cell that you should understand and recognize and be able to Answer in a in the exam So once you've done this again, if you were in class and you didn't even build the sensitivity Report this first thing I would be asking you to do you'd literally be watching Videos on Moodle in class. So definitely you know prep up This is what we do in class and then all I would ask you to do is go on Moodle And this is your second assignment take what we've learned and now do it again apply it But this time instead of working off of two lawnmowers. We're gonna work off of four Shoes I guess you know flats heels wedges sandals We're not making as much profit on one of them because again, you know a lawnmower is expensive a Flat is not But we have the same thing we have some constraints 1500 square feet of leather 500 pounds of rubber 500 200 pounds of quark There are some additional constraints, you know, obviously flats need two square feet and the same kind of process These are you know, this is the one engine and now the 20 hours of Labor hours will ignore labor hours for now So the question is you have to make at least 10 of them And you have to make two flats for each set of heels Now the one thing I want you to think about is these two constraints here that I've added in Don't worry about them for right now, you know focus on getting your sensitivity report up and running You know, you're doing an iterative process once you've got something that works off of here Then you can start to add these kind of extra little details in and this is just something you'd add to Solver you need to make at least 10 of each so this final value cell Greater than or equal to 10 right and same with each of these the next question would be now that you've built this model Some stuff. How many can we make what happens when we change those constraints? What's our min profit and max profit? What can we adjust with each one of these? So again? I hope you're all staying safe. Stay dry And you know, I'll see you on Thursday