Answer :
Final answer:
To answer the question, it is true that Excel's Solver add-in can be used to solve a product mix problem to maximize profits. Solver optimizes the profit by adjusting decision variable values within the constraints of the model. It can handle changes in constraints and aids in finding an optimal solution for maximizing profit.
Explanation:
To resolve a product mix problem and maximize profits, you can indeed make use of Excel's Solver add-in. This is true. The Solver add-in is a powerful tool in Excel that can optimize a company's profit by adjusting the variables in the model. To set up the problem, you'll start by opening an Excel workbook and structuring your variables and objective function accordingly. For example, you might input quantity in cell A1 and profits in cell A2, with profits being calculated by a formula such as =5*B1-100*SQRT(B1) where the price per unit is $5 and total cost (TC) is represented as 100q.
Once the problem is set up, you'll use Solver to determine the optimal values that maximize profit. You specify which cell is the target cell to optimize and which cells represent the decision variables. The Solver then iterates through possible combinations of the decision variables within the specified constraints (if any), seeking the values that result in the highest (or lowest, if that's the goal) value in the target cell.
In scenarios where constraints change due to various factors - such as technology or availability of resources - Solver can be particularly useful to see how these changes could affect the optimal solution. When dealing with more complex problems, the reliability of Solver might decrease, so it's wise to check results analytically when possible.
