Chapter 4, Problem 45P

a)

Summary Introduction

To determine: The way to minimize the bus company’s costs over the period of next five years.

Linear programming:

It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.

Explanation of Solution

Model:

Solver input:

The solver input is selected from under the “Data” tab in Excel and the input is given as shown below:

Formula:

The total cost is $3,420,000.

b)

Summary Introduction

To use: The solver table to determine the .change in the total number of hired, fired, total cost change due to the change in unit hiring, firing where each of them increases by the same percentage.

Linear programming:

It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.

Explanation of Solution

One-way solver table:

The one-way solver table is selected and the input is given as shown below:

Output:

In the given range of percent increases, the total of hired and fired does not change. But, the cost increases.