The University Bookstore at Tech is considering several expansion projects, including developing a store Web site for online retail and catalog purchases, buying an off-campus warehouse and its subsequent expansion, developing a clothing and gift department specializing in university logo apparel, opening a computer department carrying both hardware and software products, and creating a banking pavilion of three automated teller machines outside the store. Some of the projects will be developed over a 2-year period and some over a 3-year period, as funds permit. The net present value costs per year and the projected net present value of returns for a 5-year period for each of the projects are shown in the following table: Project Costs/Year ($1,000s) NPV Return Project ($1,000s) 1 2 3 1. Web site $120 $55 $40 $25 2. Warehouse 85 45 35 20 105 3. Clothing department 4. Computer department 5. ATMS 60 25 140 50 35 30 70 30 30 Available funds per year $150 $110 $60 In addition, the store does not have enough space available to create both a computer department and a clothing department. The bookstore director wants to know which projects to select to maximize returns. Solve using 0–1 integer programming model.
The University Bookstore at Tech is considering several expansion projects, including developing a store Web site for online retail and catalog purchases, buying an off-campus warehouse and its subsequent expansion, developing a clothing and gift department specializing in university logo apparel, opening a computer department carrying both hardware and software products, and creating a banking pavilion of three automated teller machines outside the store. Some of the projects will be developed over a 2-year period and some over a 3-year period, as funds permit. The net present value costs per year and the projected net present value of returns for a 5-year period for each of the projects are shown in the following table: Project Costs/Year ($1,000s) NPV Return Project ($1,000s) 1 2 3 1. Web site $120 $55 $40 $25 2. Warehouse 85 45 35 20 105 3. Clothing department 4. Computer department 5. ATMS 60 25 140 50 35 30 70 30 30 Available funds per year $150 $110 $60 In addition, the store does not have enough space available to create both a computer department and a clothing department. The bookstore director wants to know which projects to select to maximize returns. Solve using 0–1 integer programming model.
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...
Related questions
Question
Transcribed Image Text:The University Bookstore at Tech is considering several expansion projects, including developing a store
Web site for online retail and catalog purchases, buying an off-campus warehouse and its subsequent
expansion, developing a clothing and gift department specializing in university logo apparel, opening a
computer department carrying both hardware and software products, and creating a banking pavilion of
three automated teller machines outside the store. Some of the projects will be developed over a 2-year
period and some over a 3-year period, as funds permit. The net present value costs per year and the
projected net present value of returns for a 5-year period for each of the projects are shown in the following
table:
Project Costs/Year ($1,000s)
NPV Return
Project
($1,000s)
1
2
3
1. Web site
$120
$55
$40
$25
2. Warehouse
85
45
35
20
3. Clothing department
4. Computer department
5. ATMS
105
60
25
140
50
35
30
70
30
30
Available funds per year
$150
$110
$60
In addition, the store does not have enough space available to create both a computer department
and a clothing department. The bookstore director wants to know which projects to select to maximize
returns. Solve using 0–1 integer programming model.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
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…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.