Lecture 9 lp in excel review assign 1
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Lecture 9: LP in Excel (Review Assign. 1). AGEC 352 Spring 2012 – February 13 R. Keeney. The 3 Crop Problem. Excel Setup of 3 Crop Problem (Show Formulas). Note the use of absolute cell references (e.g. $B$3), which allows copying of the formulas down the LHS column.

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Lecture 9: LP in Excel (Review Assign. 1)

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Lecture 9 lp in excel review assign 1

Lecture 9: LP in Excel (Review Assign. 1)

AGEC 352

Spring 2012 – February 13

R. Keeney


The 3 crop problem

The 3 Crop Problem


Excel setup of 3 crop problem show formulas

Excel Setup of 3 Crop Problem(Show Formulas)

Note the use of absolute cell references (e.g. $B$3), which allows copying of the formulas down the LHS column.


Question 1 why split up the labor

Question 1: Why split up the labor?

  • When given a question like this, you should always feel free to solve the model again as part of you answer.


Question 1 labor modeling

Question 1: Labor modeling

  • The model without the labor split would have us overplanting corn relative to seasonal labor availability.

  • That model also shows us that if we could move labor around in time or get more than 1600 hours in Jan-Apr we could earn more profits.


Questions 2 4

Questions 2-4.

  • Planting

    • Corn = 275

    • Wheat = 120

    • Oats = 105

  • Profits = 18,315

  • Binding Constraints (LHS = RHS)

    • Total Land(500)

    • Wheat allotment (120)

    • Jan-Apr labor (1600)


Q4 binding constraints

Q4: Binding Constraints

  • Why do we identify these?

  • 1) While all of the constraints are part of the problem, only the constraints that bind are meaningful.

    • They define the corner point of the solution.

  • 2) Having more of the resource in a binding constraint would make us better off.

    • Without solving the model you can say that removing wheat allotment will increase profits. Solve the model to know how much…


Questions 5 and 6 more land and what is it worth

Questions 5 and 6: More land and what is it worth?

  • Solve the model again assuming we have 501 acres of total land.

    • Corn = 274.75

    • Wheat = 120

    • Oats = 106.25

      • Increase oats by 1.25 while reducing corn by 0.25

      • Add’l land lets us use more of our labor

  • Same constraints bind

  • Profits = 18329

    • 18329 – 18315 = ~14.00 is the maximum amount of rent that can be paid for land.


Question 7 no wheat allotment

Question 7: No wheat allotment

  • Constraint binds so we know profits should increase

    • Only reason we produce oats is the wheat allotment


Question 8 corn only

Question 8: Corn Only

  • Set Corn to its max value and compare

    • The value of the crop mix is that we use resources more fully…


Time for quiz

Time for Quiz


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