Complete the analysis described in the Hot Springs Spas mini-case.
Mini Case below:
HotSprings Spas is developing a production plan in an attempt to maximize profits from the
manufacture of three models of hot tubs -- Standard, Classic, and Deluxe -- this season. These
products are expected to yield estimated profits of $400, $345, and $600 each, respectively. Each
hot tub produced requires the following primary resources: labor, piping, and pumps.
Specifically, the Standard model requires approximately 15.5 labor hours, 14.5 feet of piping,
and 1 pump per hot tub. Each Classic model hot tub requires around 10.5 labor hours, 20.0 feet
of piping, and 1 pump, while the Deluxe model requires approximately 12.0 labor hours, 22.0
feet of piping, and 2 pumps per hot tub. Over the next 3 months, it appears that there will be
2,650 labor hours available, and HotSprings has recently purchased 3,450 feet of piping 231
pumps that must meet their needs during these three months (i.e., this production season).
Use Excel to build a what-if model for HotSprings Spas. Name your file hotSprings01.xlsx,
where ".xlsx" is the extension provided by Excel. Then, before trying to determine an optimal
solution, validate your model by ensuring that you get the following results (where S, C, and D
represent the number of Standard, Classic, and Deluxe hot tubs to produce this season).
S
C
10
10
10
0
0
D
10
10
0
10
0
10
0
0
0
10
Profit
$13,450
$ 7,450
$ 4,000
$ 3,450
$ 6,000
Labor
Piping
380
260
155
105
120
Pumps
565
345
145
200
220
40
20
10
10
20
After you have validated your model, use Solver to determine the optimal solution and select
only Sensitivity among the reports available. However, since it is impossible to produce
fractional units of hot tubs, modify the optimal solution slightly in order that the recommended
values of the decision variables are whole numbers. Refer to your output and address the
following on a new worksheet tab, labelled, "Recommendations".
Using a properly constructed sentence or two, write a concise solution report that provides a
recommended course of action along with a summary of the expected results from implementing
that recommendation.
Refer to the sensitivity report tab and answer the following questions. You do not need to resolve the model in order to find the correct answers.
Suppose additional labor could be acquired; what is the most that HotSprings Spas should be
willing to pay per hour for that labor?
If you have done the modeling and optimization correctly, the optimal solution indicates that the
optimal quantity of one of the hot tub models is zero. Suppose, however, that management insists
that at least a few of each model be included in HotSprings's offerings. How will this affect the
overall profit?
Using another additional worksheet (named "mathModel") in Excel, write the mathematical
model for this exercise.