Note: This problem requires the use of a linear programming application such as Solver or Analytic Solver. A firm has prepared the following binary integer program to evaluate a number of potential new capital projects. The firm's goal is to maximize the net present value of their decision while not spending more than their currently available capital. Max 100x1 + 120x2 + 90x3 + 135x4 s.t 150x1 + 200x2 + 225x3 + 175x4 500 {Constraint 1) X1 + x2 + x3 + x4 2 2{Constraint 2) x2 + X4 1{Constraint 3} x2 + x3 2 1 {Constraint 4) x1 = x4 {Constraint 5) S1, if project jis selected 0, otherwise Ij = Set up the problem in Excel and find the optimal solution. What is the expected net present value of the optimal solution?

Note: This problem requires the use of a linear programming application such as Solver or Analytic Solver. A firm has prepared the following binary integer program to evaluate a number of potential new capital projects. The firm's goal is to maximize the net present value of their decision while not spending more than their currently available capital. Max 100x1 + 120x2 + 90x3 + 135x4 s.t 150x1 + 200x2 + 225x3 + 175x4 500 {Constraint 1) X1 + x2 + x3 + x4 2 2{Constraint 2) x2 + X4 1{Constraint 3} x2 + x3 2 1 {Constraint 4) x1 = x4 {Constraint 5) S1, if project jis selected 0, otherwise Ij = Set up the problem in Excel and find the optimal solution. What is the expected net present value of the optimal solution?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter6: Optimization Models With Integer Variables

Section6.3: Capital Budgeting Models

Problem 3P: Solve Problem 1 with the extra assumption that the investments can be grouped naturally as follows:...

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This problem is based on Motorolas online method for choosing suppliers. Suppose Motorola solicits bids from five suppliers for eight products. The list price for each product and the quantity of each product that Motorola needs to purchase during the next year are listed in the file P06_93.xlsx. Each supplier has submitted the percentage discount it will offer on each product. These percentages are also listed in the file. For example, supplier 1 offers a 7% discount on product 1 and a 30% discount on product 2. The following considerations also apply: There is an administrative cost of 5000 associated with setting up a suppliers account. For example, if Motorola uses three suppliers, it incurs an administrative cost of 15,000. To ensure reliability, no supplier can supply more than 80% of Motorolas demand for any product. A supplier must supply an integer amount of each product it supplies. Develop a linear integer model to help Motorola minimize the sum of its purchase and administrative costs.
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