Drop box
All work must be written out
MGMT430 Binary Integer Programming Assignment–Week 4–Dropbox 5
Consider a small Oil production firm with 6 competing oil production projects, A – F.
The table below shows the estimated long-term profit (Net Present Value) for each project as well as the amount of investment capital required to start the project.
You have been contacted to help select the best combination of projects to maximize the Net Present Value subject to the capital investment limit of $32 million.
|
Production Projects |
||||||
|
A |
B |
C |
D |
E |
F |
|
|
Estimated Profit ($million) |
$26 |
$21 |
$18 |
$30 |
$28 |
$22 |
|
Capital required ($million) |
$11 |
$8 |
$14 |
$19 |
$13 |
Formulate a Binary Integer Programming (BIP) model on a spreadsheet.
Solver the model using Solver.
Consider a capital budgeting problem with seven project represented by binary (0 or 1) variables X1, X2, X3, X4, X5, X6, X7.
Write a constraint modeling the situation in which at most 4 projects from projects 2, 3, 4, 5, 6, and 7 can be selected.
Write a constraint modeling the situation in which
only 2
of the projects from 2, 3, 4, and 5 must be selected.
Write a constraint modeling the situation project
3 or 6 must be selected, but not both
.
Write a constraint modeling the situation in which at least 3 of the projects from 1, 2, 5, and 7 must be selected.