Broadview - EEP 162 Economics of Water Resources Computer...

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EEP 162 Economics of Water Resources Computer Exercise Introduction to Linear Programming This computer exercise will introduce you to the exciting world of linear programming. You will maximize the profits for the Broadview Water District. There are two side constraints: (i) the maximum available land is 600 acres and (ii) the available water is 200 AF. Part 1: Download the data set “Broadview.xls” from the problem set section on the class web page: http://are.berkeley.edu/courses/EEP162/ (Right click on the mouse and choose “save as”) Familiarize yourself with the data set. You have data for 6 crops: cotton, wheat, barley, alfalfa, tomatoes, and sugar beets. The input requirements list how much water, labor and other inputs each crop needs. Note that the price for water and labor is given on the worksheet “Prices”. Part 2: Set up the optimization. Step 1: Calculate the total inputs (green cells) of water and labor each crop uses by multiplying the input requirements per acre times the acres planted. Step 2: Calculate the input cost (red cells) for water, labor and other factors by multiplying the total input times the price. Step 3: Calculate the revenues and costs (blue cells) for each crop. The revenues are the acres planted times the yield per acre times the output price. The costs are the sum of the three input costs (water, labor and other). The profit is then simply revenues minus costs. Step 4: Set up the constraints (yellow cells). First add up the amount of water and display it in cell B17. Second, add up the acres planted and display it in cell B20. Part 3: Let EXCEL do the work.
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This note was uploaded on 08/01/2008 for the course ECON 162 taught by Professor Hanemann during the Spring '07 term at University of California, Berkeley.

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Broadview - EEP 162 Economics of Water Resources Computer...

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