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 3projects. Projects 3 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimalsolution.ProjectCostNet Present Value$250,000$245,000$290,000$280,000$245,000$600,000$410,000$780,000$480,000$570,000245.Which projects should be selected?Project 1 willProject 2 willProject 3 willProject 4 willProject 5 willWhat is the total net present value of these projects?Total net present value

The process by which a business evaluates possible big projects or investments is known as capital…

Answered: Your employer is trying to select from…

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

Similar questions

Formulate a chase sales and operations plan for a company with the following predicted demand: Month 1 2 3 4 5 6 Total Demand 55,200 49,600 12,800 24,800 50,400 25,600 218,400 The beginning workforce is 160 employees. The monthly output per employee is 400 units. The cost to hire and lay off a worker are $2,500 and $3,500, respectively. The cost to carry an item in inventory for one month is estimated at $14, and the stockout cost is $25 per unit. Show the production schedule, the inventory levels, and the changes in the workforce…
It is summertime and your winter coat factory is trying to decide its production schedule and staffing level for the next season. You are forecasting a demand of 5000 coats in October, 8000 coats in November, 8000 coats in December, 12000 coats in January, 12000 coats in February, and 9000 coats in March. You want to manufacture these coats at the lowest cost possible/ The first decision you need to make is how many people to hire. Each employee will cost $2500 a month. You don’t want to hire or fire any employees mid-season in order to minimize disruptions in your factory floor. You can have employees idle if there isn’t sufficient work for them to do. Employees still need to be paid even if they are idle. An employee works 20 business days a month and takes half a day to produce one coat. The employees can also be asked to work overtime, in which case you need to pay them $70 per coat they produce. You don’t need to assume there is any capacity constraint on the number of overtime…
The company is expected to have a cash balance of 65,000 on January 1, 2021. The company wants to maintain a minimum cash balance of $15,000. Loan and interest payments are made in multiples of 10,000 in the earliest quarter in which there is sufficient cash (that is, when the cash on hand exceeds the $15,000 minimum required balance). Prepare a 1.labour and 2.manufacturing overhead budget
There are three types of Market coverage. Explain the type of market coverage applicable to Lorraine’s business.
The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. Decision Alternative d₁ d₂ = EV(d₁) EV(d₂) The optimal decision is ? States of Nature $1 $2 230 80 $3 80 5 Suppose that the decision maker obtained the probabilities P(S₁) = 0.65, P(S₂) = 0.15, and P(S3) = 0.20. Use the expected value approach to determine the optimal decision. 80 55
The College of Business at Tech is planning to begin an online MBA program. The initial start-up cost for computing equipment, facilities, coursedevelopment, and staff recruitment and development is $350,000. The college plans to charge tuition of $18,000 per student per year. However,the university administration will charge the college $12,000 per student for the first 100 students enrolled each year for administrative costs and itsshare of the tuition payments. If the college can enroll 75 students the first year, how much profit will it make?
Uncertainties and risks are always associated with large real world projects and may obstacle and threaten projects in some ways. Failure in accurately identifying the project risks increases the total cost and may cause social and environmental damages as well as casualties during project execution. The aim of this study is to develop a mathematical programming model for selecting risk response strategies for construction projects. All risk response strategies for the analysed project have been identified and a mathematical model is presented based on project iron triangle; time, cost and quality to obtain the optimal risk response strategy for the construction project.Uncertainties and risks are the inherent characteristics of the real world construction projects. The project risk management deals with identifying and controlling the risks before they occur. Various risks happen in project execution phase which may reduce the performance efficiency and even cause the project failure.…
The DellaVecchia Garden Center purchases and sells Christmas trees during the holiday season. It purchases the trees for $10 each and sells them for $20 each. Any trees not sold by Christmas day are sold for $2 each to a company that makes wood chips. The garden center estimates that four levels of demand are possible: 100, 200, 500, and 1,000 trees.a. Compute the payoffs for purchasing 100, 200, 500, or1,000 trees for each of the four levels of demand.b. Construct a payoff table, indicating the events and alternative courses of action.c. Construct a decision tree.d. Construct an opportunity loss table. Use the Optimistic (maximax) to choose the best choice.e.Use the Pessimistic (maximin) to choose the best choice.f.Use the Criterion of realism (Hurwicz) to choose the best choice. α = 0.6g.Use the Equally likely (Laplace) to choose the best choice.h.Use the Minimax regret to choose the best choice.i.Use the expected monetary value to make a choice. ( Probability for the four level…
The Excel file President’s Inn Guest Database provides a list of customers, rooms they occupied, arrival and departure dates, number of occupants, and daily rate for a small bed-and-breakfast inn during one month. Room rates include breakfast and are the same for one or two guests; however, any additional guests must pay an extra $20 per person per day for breakfast. Parties staying for seven days or more receive a 10% discount on the room rate as well as any additional breakfast fees. Modify the spreadsheet to calculate the number of days that each party stayed at the inn and the total revenue for the length of stay.
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
Exercise A business student has $2,500 available from a summer job and has identified three potential stocks in which to invest. The cost per share and expected return over the next two years are given in the table below. a. Identify the decision variables, the objective, and the constraints in simple verbal statements. b. Develop a linear optimization model to determine the optimal investment strategy. Solve this LP problem using Excel Solver and state your recommendation. C. Stock Price/Share Return/Share A $12 $8 B $15 $7 C $30 $11
A decision maker is faced with a choice between two projects, both of which have start-up costs in the first year of $150m and project closing costs of $20m in year 5. Project A is expected to generate net returns of $10m, $20m, $50m and $200m from year 2 to year 5 respectively. Project B is expected to generate net returns of $100m, $80m, $50m, and $20m for year 2 to year 5 respectively. a) Show whether these projects are viable at discount rates of 1% and 10%. b) Show which project is preferred at 1% and which at 10%. c) Offer an intuitive explanation for your preferences at different interest rates d) If these are public sector projects, state two other considerations that could affect the choice of the project.

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

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

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

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

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.

SEE MORE TEXTBOOKS