Optimization of Manufacture of Personal Computers

Summary

In this project a manufacturer of personal computers is planning the introduction of two new products, a basic model and an enhanced model. Using unconstrained optimization which involves standard solution methods of multivariable calculus, an analytical model is built to determine the production levels of the two types of computer. Constraints are then introduced based on the available production capacity and a model is developed using Lagrange multiplier methods. The problem is then reformulated as a linear programming problem by introducing some simplifying assumptions and solved to obtain the optimum production levels. Sensitivity analysis is also introduced involving both the profit and optimal production levels.