Sensitivity Analysis Beerco manufactures ale and beer from c

Sensitivity Analysis

Beerco manufactures ale and beer from corn, hops, and malt. At present, 40 lbs of corn, 30 lbs of hops, and 40 lbs of malt are available. A barrel of ale sells for $40 and requires 1 lb of corn, 1 lb of hops, and 2 lbs of malt. A barrel of beer sells for $50 and requires 2 lbs of corn, 1 lb of hops and 1 lb of malt. Beerco can sell all ale and beer that is produced. To optimize profits, Beerco solves the following LP in AMPL formatt:

Solve the LP with the Simplex Method and use the optimal basis to answer the following questions:

(a) How many barrels of ale and beer should be produced to maximize Beerco’s revenue?

(b) For what range of values of the price of ale does the solution you indicated in part (a) remain optimal?

(c) Suppose that Beerco has the opportunity to purchase an additional 5 lbs of one of the ingredients (corn, hops, or malt) for $50. Which ingredient, if any, should it purchase?

Solution

so if he makes more ale ans less beer it will be loss for sure so to get to the number w took as much as possible beer and then to get to the optiomal solution so that we reach a point of optimality in between

1.15 - beer , 10-ale

2. 40 -49

3. corn