3.Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listedbelow. The capital budget available is $1 million. In addition to spending constraints, your employer would like to select at least 2projects. Projects 5 and 3 cannot both be selected together. Formulate the problem as a linear program and determine the optimalsolution.ProjectCostNet Present Value$255,000$760,000$670,000$690,000$620,000$780,000$230,000$270, 000$250, 000$260,000Which projects should be selected?Project 1 willProject 2 willProject 3 willProject 4 willProject 5 will

Linear programming is a simple technique in which we use linear functions to represent complex…

Answered: Your employer is trying to select from…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 68P

See similar textbooks

Similar questions

n additional equipment (AE) costing$3,500,000 will be needed at the end of year 3. At the end of seven(7) years, the original equipment, IE, will have no resale value butthe supplementary equipment, AE, can be sold for $50,000. A workingcapital of $1,350,000 will be needed.The project is forecast to generate sales of agri-products over theseven years as follows:Year 1 70,000 unitsYear 2 100,000 unitsYears 3-5 250,000 unitsYears 6-7 325,000 unitsA sale price of $150 per unit for the first two years is expected andthen decline to $90 per unit thereafter as the newness of the productloses some sheen. The variable expenses will amount to 30% of salesrevenue. Fixed cash operating expenses will amount to $1,100,000 peryear.The company falls in the 25% tax category for ordinary income and 40%tax category for capital gain.The initial equipment is depreciated as per the 7-year MACRS systemand the additional equipment is depreciated on a straight-line basis.In the event of a negative taxable…
Conoly Co. has identified an investment projectwith the following cash flows. If the discount rate is 10 percent, what is the present valueof these cash flows? What is the present value at 18 percent? At 24 percent?Year Cash Flow1 $ 9602 8403 9354 1,350
Formulate an LP model for the following problems.1. Bernadette intends to invest up to ₱50,000 in either Best Fund, or a time deposit orboth. The Best Fund pays 8% per year and the time deposit pays 9%. Because theBest Fund is riskier than the time deposit, so she intends to put at most ₱30,000 intothe time deposit and at least ₱10,000 into the Best Fund. How much should she allotto each investment in order to maximize her returns?
Let X₁ = 1 if Project i is selected, i = 1,2,3,4,5; and 0 otherwise: Which answer below indicates that if Project 2 is selected, then Project 5 must also be selected? X₂ + X5 = 1 X5-X₂ <= 1 a. b. C. d. e. O a O с P D X₂ + X5 <=1 X₂ <= X5 X5 <= X₂
Method of Least Squares, Goodness of Fit Deepa Dalal opened a free-standing radiology clinic. She had anticipated that the costs for the radiological tests would be primarily fixed, but she found that costs increased with the number of tests performed. Costs for this service over the past nine months are as follows: Month Radiology Tests Total Cost January 2,800 $133,500 February 2,600 135,060 March 3,100 175,000 April 3,500 170,600 May 3,400 176,900 June 3,700 186,600 July 3,840 174,450 August 4,100 195,510 September 3,450 185,300 Required: 1. Compute the cost formula for radiology services using the method of least squares. If required, round your answers to two decimal places. Y = + X 2. Using the formula computed in Requirement 1, what is the predicted cost of radiology services for October for 3,500 appointments? (Round the answer to the nearest dollar.)
The following is a breakdown of supplying and installing a piece of equipment to a project owner, atthe time of contract: EGPCost of equipment 250,000Manpower (installation) 50,000Overhead and profits 70,000i – Calculate the price of supplying and installing the equipmentii – If the supply and installing of the equipment was delayed by the project owner, calculate theescalated price of works based on the FIDIC Red Book 1990 formula given:Updated cost of equipment 270,000 EGPBase price index of manpower 123.2Updated price index of manpower 144.9
Five projects are reviewed over a five-year period to evaluate the expected rate of return. The table below shows the expected profits as well as the related annual cost to the project. We want to know that, In a five-year period, choosing which of these projects is cost-effective? Write the desired mathematical model (explain your logic). annual cost Project 2 expected profit 1 3. 32 4 4 7 35 3. 2 4 5. 8. 40 4 3. 6. 31 15 6. 6. 8. 6. 25 Available credit 65 62 68 70 75 6. 4. 4. 4. 3. 41 3.
per board and fixed costs of $300,000. Determine: The number of skateboards required to sell to breakeven. The profit if they have been selling about 8,000 pr year. a) Now, they are considering undertaking an advertising program with GBC Promotions that would cost $150,000 (additional fixed cost) and increasing the price by $160 to $400. Find the number of skateboards required to sell at $400 and make the same amount of profit as in part “b”. b) What is the % sales decline that can occur in c, to make the same profit as before
Four proposals are being considered with investment and NPW shown below. C can only beconsidered if B is implemented. B and D and E are mutually exclusive. The budget is $80.A B C D EInvestment $10 $20 $30 $40 $50NPW $34 $28 $20 $16 $32a) Formulate this as a 0-1 integer program (objective function and constraints).b) Use trial and error to find all feasible solutions, and indicate which is optimal.c) Set up this problem in Excel, and use Solver to find the same optimal solution
A section of the Excel output is shown below: Final Reduced Objective Allowable Allowable Name Value Cost Coefficientincrease Decrease Product A 1500 100 20 40 Product B 1000 200 120 60 What will happen if the objective coefficient for Product B increases to 300? O The objective function value will increase by $100,000 and the optimal solution will also change. O The problem must be recalculated because the increase caused the range of feasibility to be exceeded. The objective function value will increase by $100, but the optimal solution will remain the same. O The objective function value will increase by $100,000, but the optimal solution will remain the same. O The problem must be recalculated because the increase caused the range of optimality to be exceeded.
1. Explain the meaning of the expected value of perfect information (EVPI) in this problem. Based on the results of (iii) and (iv), which investment would you choose? 2. Compute the coefficient of variation, the return-to-risk ratio (RTRR) for each investment. Based on (vii) and (viii), what investment would you choose? Compare the results of (vi) and (ix) and explain any differences
Bob and Dora Sweet wish to start investing $1,000 each month. The Sweets are looking at five investment plans and wish to maximize their expected return each month. Assume interest rates remain fixed and once their investment plan is selected they do not change their mind. The investment plans offered are: Fidelity 9.1% return per year Optima 16.1% return per year CaseWay 7.3% return per year Safeway 5.6% return per year National 12.3% return per year Since Optima and National are riskier, the Sweets want a limit of 30% per month of their total investments placed in these two investments. Since Safeway and Fidelity are low risk, they want at least 40% of their investment total placed in these investments.Formulate the LP model for this problem, using the standard LP format. Remember to define the objective function, the decision variables, and label the constraint functions. There is no need to solve the problem. Note:- Do not provide handwritten solution. Maintain…

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

SEE MORE TEXTBOOKS