Reference no: EM132902935

A corporation plans on building a maximum of 11 new stores in a large city. They will build these stores in one of three sizes for each location - a convenience store (open 24 hours), standard store, and an expanded services store. The convenience store requires $4.125 million to build and 30 employees to operate. The standard store requires $8.25 million to build and 15 employees to operate. The expanded - services store requires $12.375 million to build and 45 employees to operate. The corporation can dedicate up to $82.5 million in construction capital, and 300 employees to staff the stores. On the average, the convenience store nets $1.2 million annually, the standard store nets $2 million annually, and the expanded services store nets $2.6 million annually. How many of each should they build to maximize revenue?

a) Formulate the problem on Excel (!).

b) Find the optimal level of these stores in three sizes.

c) They also want to check the feasibility of opening one new store called "Mega Store" after the completion of their 11 new stores. The mega store requires $14.75 million to build and 52 employees to operate. The store nets $3.2 annually. Is it profitable?