California MegaTech is a manufacturing company that, due to low interest rates, thinks now may be the time to finance expansion into the Los Angeles and/or San Francisco areas by building factories there. However, the company only has a $10 million capital budget. So management must decide what to build and where in order to maximize the expansion's net present value (NPV). This investment is subject to the following considerations: Net Present Value ($mil) LA SF Capital Required ($mil) LA SF Warehouse 6 4 Warehouse Factory 8 Factory 3 The company is willing to build a factory at either or both locations. The company is willing to build no more than one factory in each location. The company is willing to build only ONE warehouse. The company is willing to build a warehouse ONLY if a factory is built at the same location. Each potential factory/warehouse has capital requirements. Each potential factory/warehouse has a positive net present value. The company is only willing to commit $10 million to the project. What is the proper formulation for this problem? Show objective function, decision variables, and constraints. Assuming the company will build at least one factory or warehouse, identify all feasible combinations of factories and warehouses in LA and SF.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
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