10330-7-8P

AID:1825|07/01/2014

a)
xi
Let

1 if investment alternative i is selected

0 otherwise

4, 000 x1 6, 000 x2 10,500 x3 4, 000 x4 8000 x5 3000 x6

Max
s.t.
3000 x1 2500 x2 6000 x3 2000 x4 5000 x5 1000 x6 10,500
1000 x1 3500 x2 4000 x3 1500 x4 1000 x5 500 x6 7, 000
4000 x1 3500 x2 5000 x3 1800 x4 4000 x5 900 x6 8, 750
x1, x2, x3, x4, x5, x6 0,1

The optimal solution from this constrain is as follows, find out with the help of Excel
salver software.
x3, 1, x4, 1, x6 1

The value of the optimal solution is (x3)10,500+(x4)4000+(x6)3000 = 17,500

b)
Implemented of warehouse expansion for that in our model should be added this mutually
exclusive constraint also. The constraint is as follow,
x1, x2 1

The constraint is not affecting the model, Therefore the optimal solution is not change.

c)
Marketing of new product is carried out, the advertising also counted for constraint
model. The modification for the model is as follows,
x3, x4 0

The constraint is not affecting the model, Therefore the optimal solution is not change.