CALIFORNIA MANUF.

CO FACILITY LOC PROBLEM

NPV ($millions) LA SF
Warehouse 6 4

Factory 8 5

Capital Required
($millions) LA SF
Warehouse 5 2 Capital Capital
Spent Available
Factory 6 3 0 <= 10

Total Maximum
Build? LA SF Warehouses Warehouses
Warehouse 0 0 0 <= 1
<= <=
Factory 1 1

Total NPV ($millions) 0

 A B C D E F G H I J
1 TAZER CORP PROJ PROBLEM
2
3
4 Up Stable Choice Hope Release Total Budget
5 R&D Investment ($million) 400 300 600 500 200 1200 <= 1200
6 Success Rate 50% 35% 35% 20% 45%
7 Revenue if Successful ($million) 1400 1200 2200 3000 600
8 Expected Profit ($million) 300 120 170 100 70 540
9
10 Do Project? 1 0 1 0 1
CALIENTE CITY FIRE STATION PROB

Fire Station in Tract

1 2 3 4 5 6 7 8
1 2 8 18 9 23 22 16 28
Response 2 9 3 10 12 16 14 21 25
Times 3 17 8 4 20 21 8 22 17
(Minutes) 4 10 13 19 2 18 21 6 12
for a Fire 5 21 12 16 13 5 11 9 12
in Tract 6 25 15 7 21 15 3 14 8
7 14 22 18 7 13 15 2 9
8 30 24 15 14 17 9 8 3

Cost of Station 350 250 450 300 50 400 300 200

($thousands) Number
Covering
1 1 1 0 1 0 0 0 0 1 >= 1
Response 2 1 1 1 0 0 0 0 0 1 >= 1
Time 3 0 1 1 0 0 1 0 0 1 >= 1
<= 4 1 0 0 1 0 0 1 0 1 >= 1
10 5 0 0 0 0 1 0 1 0 1 >= 1
Minutes? 6 0 0 1 0 0 1 0 1 1 >= 1
7 0 0 0 1 0 0 1 1 2 >= 1
8 0 0 0 0 0 1 1 1 2 >= 1

Total
Fire Station in Tract Cost
1 2 3 4 5 6 7 8 ($thousands)
Station in Tract? 0 1 0 0 0 0 1 1 750
Wyndor Glass co. Product mix problem
ALGEBRAIC
doors windows
Unit price 300 500
Hours
Hours Used per unit Hours used Available
plant 1 1 0 2 <= 4
plant 2 0 2 12 <= 12
plant 3 3 2 18 <= 18

doors windows total profit

units produced 2 6 3600

TRENDLINE
constructing a nonlinear formula

Level of activity profit Pofit vs Level of activity

2 16
35
4 24
5 28 30
7 30 25
10 33
20

15

10

0
0 2 4 6 8 10 12
WYNDOR PROB MARKETIN COSTS

Doors Windows
Unit Profit (Gross) 375 700
Hours Hours
Hours Used Per Unit Produced Used Available
Plant 1 1 0 3.214 <= 4
Plant 2 0 2 8.357 <= 12
Plant 3 3 2 18 <= 18

Doors Windows Gross Profit from Sales 4130

Units Produced 3.214 4.179

Marketing Cost 258 1164 Total Marketing Cost 1422

Total Profit 2708

PORTFOLIO OF 3 STOCKS

Stock 1 Stock 2 Stock 3

Expected Return 21% 30% 8%

Risk (Stand. Dev.) 25% 45% 5%

Joint Risk (Cover.) Stock 1 Stock 2 Stock 3

Stock 1 0.040 -0.005
Stock 2 -0.010
Stock 3

Stock 1 Stock 2 Stock 3 Total

Portfolio 40.2% 21.7% 38.1% 100% = 100%

Minimum
Expected
Portfolio Return
Expected Return 18.0% >= 18.0%

Risk (Variance) 0.0238

Risk (Stand. Dev.) 15.4%