Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits,are listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would liketo select at least 3 projects. Projects 3 and 5 cannot both be selected together. Formulate the problem as a linearprogram and determine the optimal solution.Project12345Cost$220,000$295,000$245,000$205,000$285,000Project 1 willProject 2 willProject 3 willProject 4 willProject 5 willWhich projects should be selected?Net Present Value$430,000$480,000$750,000$500,000$670,000be selectednot be selectedWhat is the total net present value of these projects?Total net present value

Here, the objective function is maximizing the total net present value for all the projects, the…

Answered: Which projects should be selected?…

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

A business student has $3,500 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. Complete parts a and b. A $12 $8 Stock Price/share Return/share B $16 $5 A. Amount invested in stock A B. Amount invested in stock B C. Return for each stock D. Amount invested in stock C E. Price of each stock C $25 $11 a. Identify the decision variables, objective function, and constraints in simple verbal expressions. Identify the decision variables. Select all that apply.
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?
3. The comptroller of Microsoft Corporation has $100 million of excess funds to invest. She has been introduced to invest the entire amount for one year in either stocks or bonds (but not both) and then to reinvest the entire fund in either stocks or bonds (but not both) for one year more. The objective is to maximize the expected monetary value of the fund at the end of the second year. The annual rates of return on these investments depend on the economic environment, as shown in the following table: Rate of Return Economic Environment Stocks Bonds Growth 20% 5% Recession -10% 10% Depression -50% 20% The probabilities of growth, recession, and depression for the first year are 0.7, 0.3, and 0, respectively. If growth occurs in the first year, these probabilities remain the same for the second year. However, if a recession occurs in the first year, these probabilities change to 0.2, 0.7, and 0.1, respectively, for the second year. Construct the decision tree for this problem and…
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
Consider an investment project with the following cash flows: N Cash Flow 0 -$5,0001 $02 $4,8403 $1,331ComputcthelRRforthisinvestment.lsthisprojectacceptablcatMARR = 10%?
Louis Clark, the new administrator for the surgical clinic, was trying to figure out how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities expense based on square footage for each department, to allocate administration expense based on direct costs, and to allocate laboratory expense based on direct costs, and to allocate laboratory expense based on tests. What would the results be?
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
A chef must decide how many chocolate lava cakes to prepare for the upcoming Mother's Day Dinner special. The chef can either prepare 50, 100, or 150 lava cakes. Assume that demand for the lava cakes can be 50, 100, or 150. Each dish costs $5 to make and is priced at for $7 on the menu. Unsold cakes are donated to a nearby charity center. Assume that there is no opportunity cost for lost sales. Which alternative should be chosen based on the maximax criterion?
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.)
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $83,000 at the end of 2021 and the company's actuary projects her salary to be $245,000 at retirement. The actuary's discount rate is 9%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) At the beginning of 2022, the pension formula was amended to: 1.60% × Service years × Final year's salary The amendment was made retroactive to apply the increased benefits to prior service years. Required: 1. What is the company's prior service cost at the beginning of 2022 with respect to Davenport after the amendment described above?2. Since the amendment occurred at…
Jasmine is a mother of three children, ages 6 months, 2 years, and 3 and a half. Jasmine makes $24,000 a year at her full-time job, while her husband, Jamal, makes $45,000 a year. The daycare their children attend currently costs them $18,000 a year for all three children, but next year the cost is going up to $21,000. Jasmine wonders whether it’s even worth working, when she spends so much of her salary on childcare, and is considering quitting her job completely or working part-time instead. Jasmine’s dilemma is an example of a gendered process that occurs in the point of overlap of which two institutional arenas? the market and the family the family and the state the family and religion the state and the market
Assume the maximum demand for Super is 600,000 barrels. What is the optimal maximum profit? Hints: There are six decision variables are as follows: R1: # of barrels of ingredient 1 used in Regular fuel R2: # of barrels of ingredient 2 used in Regular fuel R3: # of barrels of ingredient 3 used in Regular fuel S1: # of barrels of ingredient 1 used in Super fuel S2: # of barrels of ingredient 2 used in Super fuel S3: # of barrels of ingredient 3 used in Super fuel Some calculations you would need in the constraints: The total # of barrels for Regular would be R1+R2+R3. The total # of barrels for Super would be S1+S2+S3. The total # of barrels of Ingredient 1 would be R1+S1. The total # of barrels of Ingredient 2 would be R2+S2. The total # of barrels of Ingredient 3 would be R3+S3.

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

Which projects should be selected? Project 1 will Project 2 will Project 3 will Project 4 will Project 5 will be selected not be selected What is the total net present value of these projects? Total net present value