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he government is auctioning off oil leases at two sites. At each site, 150,000 acres of land are to be auctioned. Cliff Ewing, Blake Barnes, and Alexis Pickens are bid- ding for the oil. Government rules state that no bidder can receive more than 45% of the land being auctioned. Cliff has bid $2000 per acre for site 1 land and $1000 per acre for site 2 land. Blake has bid $1800 per acre for site 1 land and $1500 per acre for site 2 land. Alexis has bid $1900 per acre for site 1 land and $1300 per acre for site 2 land. a.    Determine how to maximize the government’s revenue with a transportation model. b.    Use SolverTable to see how changes in the government’s rule on 45% of all land being auctioned affect the optimal revenue. Why can the optimal revenue not decrease if this percentage required increases? Why can the optimal revenue not increase if this percentage required decreases?

he government is auctioning off oil leases at two sites. At each site, 150,000 acres of land are to be auctioned. Cliff Ewing, Blake Barnes, and Alexis Pickens are bid- ding for the oil. Government rules state that no bidder can receive more than 45% of the land being auctioned. Cliff has bid $2000 per acre for site 1 land and $1000 per acre for site 2 land. Blake has bid $1800 per acre for site 1 land and $1500 per acre for site 2 land. Alexis has bid $1900 per acre for site 1 land and $1300 per acre for site 2 land. a.    Determine how to maximize the government’s revenue with a transportation model. b.    Use SolverTable to see how changes in the government’s rule on 45% of all land being auctioned affect the optimal revenue. Why can the optimal revenue not decrease if this percentage required increases? Why can the optimal revenue not increase if this percentage required decreases?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter11: Simulation Models
Section11.2: Operations Models
Problem 2P: In Example 11.1, the possible profits vary from negative to positive for each of the 10 possible...
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The government is auctioning off oil leases at two sites. At each site, 150,000 acres of land are to be auctioned. Cliff Ewing, Blake Barnes, and Alexis Pickens are bid- ding for the oil. Government rules state that no bidder can receive more than 45% of the land being auctioned. Cliff has bid $2000 per acre for site 1 land and $1000 per acre for site 2 land. Blake has bid $1800 per acre for site 1 land and $1500 per acre for site 2 land. Alexis has bid $1900 per acre for site 1 land and $1300 per acre for site 2 land.

a.    Determine how to maximize the government’s revenue with a transportation model.

b.    Use SolverTable to see how changes in the government’s rule on 45% of all land being auctioned affect the optimal revenue. Why can the optimal revenue not decrease if this percentage required increases? Why can the optimal revenue not increase if this percentage required decreases?

1 Oil lease auction 2 3 4 5 Ewing 6 Bames 7 Pickens 8 9 10 HHHHHHH9222 12 11 Number of acres sold to bidders 17 13 Ewing 14 Bames 15 Pickens 16 Total 19 18 Available 21 Bids for sites (dollars/acre) 25 26 20 Revenue ($millions) 27 28 29 30 31 32 33 34 X✓ fx Max % that can be sold to any bidder 23 Maximum land perchased 24 35 36 37 38 39 40 A n. Point cirement P5-43 2000 1800 1900 =SUM(B13:815) -0.45*(SUM(F13:F14)) B 0.45 P5-46 SUMPRODUCT(B5:C7,813:C15) Site 1 STS_1 Site 1 1000 1500 1300 C =SUM(C13:C15) P5-52 Site 2 -0.45*(SUM(F13:F14)) + Site 2 Kula Anderson SELICT D =SUM(B13:C13) =SUM(B14:C14) -SUM(B15:C15) Total -0.45*(SUM(F13:F14)) <= KE E Set Objective: 150000 150000 $B$20 F To: O Max Min By Changing Variable Cells: SBS13:SC$15 Solver Parameters Advanced Max allowed 1 Value Of: Subject to the Constraints: $B$16:$C$16 <= $F$13:$F$14 $D$13:$D$15 <= $B$18:$D$18 Make Unconstrained Variables Non-Negative Select a Solving Method: Simplex LP ▼ 0 G Text to Columns Add Change Delete Reset All Load/Save Options Solving Method Select the GRG Nonlinear engine for Solver Problems that are smooth nonlinear. Select the LP Simplex enaine for linear Solver Problems. Ex 2 MIN
Transcribed Image Text:1 Oil lease auction 2 3 4 5 Ewing 6 Bames 7 Pickens 8 9 10 HHHHHHH9222 12 11 Number of acres sold to bidders 17 13 Ewing 14 Bames 15 Pickens 16 Total 19 18 Available 21 Bids for sites (dollars/acre) 25 26 20 Revenue ($millions) 27 28 29 30 31 32 33 34 X✓ fx Max % that can be sold to any bidder 23 Maximum land perchased 24 35 36 37 38 39 40 A n. Point cirement P5-43 2000 1800 1900 =SUM(B13:815) -0.45*(SUM(F13:F14)) B 0.45 P5-46 SUMPRODUCT(B5:C7,813:C15) Site 1 STS_1 Site 1 1000 1500 1300 C =SUM(C13:C15) P5-52 Site 2 -0.45*(SUM(F13:F14)) + Site 2 Kula Anderson SELICT D =SUM(B13:C13) =SUM(B14:C14) -SUM(B15:C15) Total -0.45*(SUM(F13:F14)) <= KE E Set Objective: 150000 150000 $B$20 F To: O Max Min By Changing Variable Cells: SBS13:SC$15 Solver Parameters Advanced Max allowed 1 Value Of: Subject to the Constraints: $B$16:$C$16 <= $F$13:$F$14 $D$13:$D$15 <= $B$18:$D$18 Make Unconstrained Variables Non-Negative Select a Solving Method: Simplex LP ▼ 0 G Text to Columns Add Change Delete Reset All Load/Save Options Solving Method Select the GRG Nonlinear engine for Solver Problems that are smooth nonlinear. Select the LP Simplex enaine for linear Solver Problems. Ex 2 MIN
A 1 Oil lease auction 2 3 Bids for sites (dollars/acre) 4 5 Ewing 6 Bames 7 Pickens 8 9 Max % that can be sold to any bidder 10 11 Number of acres sold to bidders 12 13 Ewing 14 Bares 15 Pickens 16 Total 22 23 Maximum land pell 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 ▶ B 17 18 Available 19 20 Revenue ($millions $520,500,000 21 111 Site 1 $2,000 $1,800 $1,900 P5-43 Site 1 135000 0 15000 150000 $135,000 0.45 C P5-46 Site 2 $1,000 $1,500 $1,300 Site 2 0 135000 15000 150000 $135,000 D Total 135000 135000 30000 $135,000 STS_1 E <= <= LL F G Specify the following information about the input to be varied and the outputs to be captured. Input cell: $B$23 (Optional) Descriptive name for input: Output cell(s): Max allowed 150000 150000 Parameters for oneway table Values of input to use for table O Base input values on following: Minimum value: 0.3 0.9 Maximum value: Increment: 0.05 Max pct per bidder Use the values from the following range: Input value range: Use the values below (separate with Input values: $B$20 H OK Cancel Note about specifying output cells: The safest way to select multiple output cells or ranges is to put your finger on the Ctrl key and then drag as many output cell ranges as you like. This will automatically insert commas between the ranges you select. 1 J K L M
Transcribed Image Text:A 1 Oil lease auction 2 3 Bids for sites (dollars/acre) 4 5 Ewing 6 Bames 7 Pickens 8 9 Max % that can be sold to any bidder 10 11 Number of acres sold to bidders 12 13 Ewing 14 Bares 15 Pickens 16 Total 22 23 Maximum land pell 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 ▶ B 17 18 Available 19 20 Revenue ($millions $520,500,000 21 111 Site 1 $2,000 $1,800 $1,900 P5-43 Site 1 135000 0 15000 150000 $135,000 0.45 C P5-46 Site 2 $1,000 $1,500 $1,300 Site 2 0 135000 15000 150000 $135,000 D Total 135000 135000 30000 $135,000 STS_1 E <= <= LL F G Specify the following information about the input to be varied and the outputs to be captured. Input cell: $B$23 (Optional) Descriptive name for input: Output cell(s): Max allowed 150000 150000 Parameters for oneway table Values of input to use for table O Base input values on following: Minimum value: 0.3 0.9 Maximum value: Increment: 0.05 Max pct per bidder Use the values from the following range: Input value range: Use the values below (separate with Input values: $B$20 H OK Cancel Note about specifying output cells: The safest way to select multiple output cells or ranges is to put your finger on the Ctrl key and then drag as many output cell ranges as you like. This will automatically insert commas between the ranges you select. 1 J K L M
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