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Consider the following problem. Our factory is building three products: TV sets, stereos and speakers. Each product is assembled from parts in inventory, and there are five types of parts: chassis, picture tubes, speaker cones, power supplies and electronics units. Our goal is to produce the mix of products that will maximize profits, given the inventory of parts on hand. The profit per unit of TV set, stereos and speakers is $60, $50 and $50, respectively. The number of chassis, picture tubes, speaker cones, power supplies and electronics available in inventory are 450, 250, 800, 450 and 600 units, respectively. The parts required by each product is provided in the table below. For example, a TV set requires one each of chassis, picture tube, and power supply and two each of speaker cone and electronics. Based on the Spreadsheet model and Sensitivity reports provided below, answer the following questions. All answers have to be explained clearly. One word answers will not be sufficient.

Can you forecast the change to the optimal value if you bought 250 additional units of Electronics at $20 each? Explain your answer? Going back to the original problem, electronics are now in short supply in the regular market and you have to buy it in the black market? If it costs $30 per unit in the black market, would you buy it? If so, how many? If not, why not?

What happens to the optimal product mix and profit if the profit associated with each speakers goes up to $60? Explain your answer.

			TV Set	Stereo	Speaker
	Number to Build>>		0	0	600
Part Name	Inventory	No. Used
Chassis	450	0	1	1	0
Picture Tube	250	0	1	0	0
Speaker Cone	800	600	2	2	1
Power Supply	450	0	1	1	0
Electronics	600	600	2	1	1
		Profits
		By Product>>>	$60	$50	$50
	Total	30000

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