Homework Help is Here – Start Your Trial Now!
Business
Operations Management
a. Develop and solve an integer programming model for maximizing the net present value. b. Assume that only one of the warehouse expansion projects can be implemented. Modify your model from part (a). c. Suppose that if test marketing of the new product is carried out, the advertising campaign also must be conducted. Modify your formulation from part (b) to reflect this new situation.

a. Develop and solve an integer programming model for maximizing the net present value. b. Assume that only one of the warehouse expansion projects can be implemented. Modify your model from part (a). c. Suppose that if test marketing of the new product is carried out, the advertising campaign also must be conducted. Modify your formulation from part (b) to reflect this new situation.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question

can you help answer question 1

1. Investment Net Present Value. Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream of returns, the capital requirements, and the available capital funds over the next three years are summarized as follows: Capital Requirements (5) Alternative Limited warehouse expansion Extensive warehouse expansion Test market new product Advertising campaign Basic research Purchase new equipment Capital funds available Net Present Value (5) 4,000 6,000 10,500 4,000 8,000 3,000 Year 1 3,000 1,000 Year 2 2,500 3,500 1,000 Year 3 6,000 4,000 5,000 10,500 4.000 2,000 1,500 1,800 3,500 5,000 1,000 4,000 500 900 7,000 8,750 a. Develop and solve an integer programming model for maximizing the net present value. b. Assume that only one of the warehouse expansion projects can be implemented. Modify your model from part (a). c. Suppose that if test marketing of the new product is carried out, the advertising campaign also must be conducted. Modify your formulation from part (b) to reflect this new situation. 2. Machine Tool Production Planning. King City Inc. manufactures machine tools. The production planner who oversees the production of two of King City's machines needs to determine how many of each to produce this month. The two machines, TopLathe and BigPress, each require a certain common component. Each TopLathe requires 10 of these components and each BigPress requires 7. Only 49 components are available this month. The sales department requires that the total number of machines produced in a month must be at least 5 (the number TopLathes plus the number BigPresses must be at least 5). The profit for a TopLathe is $50,000 and $34,000 for a BigPress. a. Assuming that adequate labor and all other resources are available, formulate an integer programming model to determine how many of each product King City should produce to maximize profit. b. Based on the solution for the LP relaxation model given below, round the TopLathe and BigPress values. Is the solution feasible? Why?
Transcribed Image Text:1. Investment Net Present Value. Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream of returns, the capital requirements, and the available capital funds over the next three years are summarized as follows: Capital Requirements (5) Alternative Limited warehouse expansion Extensive warehouse expansion Test market new product Advertising campaign Basic research Purchase new equipment Capital funds available Net Present Value (5) 4,000 6,000 10,500 4,000 8,000 3,000 Year 1 3,000 1,000 Year 2 2,500 3,500 1,000 Year 3 6,000 4,000 5,000 10,500 4.000 2,000 1,500 1,800 3,500 5,000 1,000 4,000 500 900 7,000 8,750 a. Develop and solve an integer programming model for maximizing the net present value. b. Assume that only one of the warehouse expansion projects can be implemented. Modify your model from part (a). c. Suppose that if test marketing of the new product is carried out, the advertising campaign also must be conducted. Modify your formulation from part (b) to reflect this new situation. 2. Machine Tool Production Planning. King City Inc. manufactures machine tools. The production planner who oversees the production of two of King City's machines needs to determine how many of each to produce this month. The two machines, TopLathe and BigPress, each require a certain common component. Each TopLathe requires 10 of these components and each BigPress requires 7. Only 49 components are available this month. The sales department requires that the total number of machines produced in a month must be at least 5 (the number TopLathes plus the number BigPresses must be at least 5). The profit for a TopLathe is $50,000 and $34,000 for a BigPress. a. Assuming that adequate labor and all other resources are available, formulate an integer programming model to determine how many of each product King City should produce to maximize profit. b. Based on the solution for the LP relaxation model given below, round the TopLathe and BigPress values. Is the solution feasible? Why?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 6 steps with 16 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS