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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

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

AGEC 352

Spring 2012 – February 13

R. Keeney

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…
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