What are the constraints applied to this problem

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Assignment: Introduction to Business Analytics- Decision Variables and Maximum Total Annual Return

Problem A:

Work on the following questions.

Build a spreadsheet model and find a solution to maximize the total annual return for Caroline's Farm.

Caroline owns a farm in California with 40 acres of land and wants to grow carrots, broccoli, and cauliflower during the winter season. The farm is named after Caroline, called "Caroline's Farm and Market".

Each crop requires an investment (including purchases of supplies and fertilizer), and manual labor.

1) Growing an acre of carrots requires a $50 investment and 20 hours of manual labor.
2) Growing an acre of broccoli requires a $35 investment and 35 hours of labor.
3) Growing an acre of cauliflower needs a $45 investment and 30 hours of labor.

Caroline and her family have $2,500 in their budget and can spend up to 1,000 hours of labor.

Here is the profit information for each crop.

1) The profit from an acre of carrots is $200.
2) The profit from an acre of broccoli is $250.
3) The from an acre of cauliflower is $230.

In order to have a variety of crops for sale, Caroline wants to allocate at least 5 acres for each crop.
To maximize the total profit, how many acres of land should the farmer allocate to each crop.

Question I: List all the constraints applied to this problem.

Question II: How much should be invested in those three investment options respectively in order to maximize the total annual return?

Question III: How much is the maximum total annual return?

Problem B:

Work on the following questions.

Real Estate Project Selection: Brooks Development Corporation (BDC) faces the following capital budgeting decision. Six real estate projects are available for investment. The net present value and expenditures required for each project (in millions of dollars) are as follow:

Project	1	2	3	4	5	6
Net Present Value ($ Millions)	$ 15	$ 5	$ 13	$ 14	$ 20	$ 9
Expenditure Required ($ Millions)	$ 90	$ 34	$ 81	$ 70	$ 114	$ 50

The budget for this investment period is $220 million.

Formulate a binary integer program that will enable BDC to find the projects to invest in to maximize net present value, while not exceeding the budget.

Question I: What are the constraints applied to this problem?

Question II: Based on the optimized solution, which project will be undertaken? How much is the maximum net present value?

Question III: How much of the budget is unused?

Reference no: EM133736912

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