HW5_Solutions - OSCM 230 Homework 05 HOMEWORK #5 SOLUTIONS...

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Homework 05 H O M E W O R K   # 5   S O L U T I O N S I N T E G E R   P R O G R A M M I N G 6-18. There are 8 decision variables (A, H, E, N, S, M, B, and R) corresponding to the eight investment options. Each variable can take only one of two values: = 1 if the investment is chosen, and = 0 if it is not. Objective: Maximize total return = Sum of (Return per investment * Investment DV) Subject to: $500A+ $1,000H+ $350E+ $490N+ $700S+ $270M+ $800B+ $400R $3,000 Cost ($'000) A + H 1 Bond E + N + S 2 Utility M + B + R 2 Regular A + H + E + N + S + M + B + R 5 Total All vars = 0, 1 Binary Solution: See file P6-18.XLS. Ando -ver Hamil -ton Easy Nebr aska South- ern Man- uel Build -ers Rest Invest? (1 = Yes) 0 1 1 1 0 1 1 0 Exp return ($'000) $50 $100 $30 $45 $65 $20 $90 $35 $285.0 6-19. There are 7 binary decision variables (A to G) corresponding to the seven investment options. Each variable can take only one of two values: = 1 if the investment is chosen, and = 0 if it is not. Objective: Maximize total return = Sum of (Return per investment * Investment DV) Subject to: $5.0A+ $8.0B+ $3.5C+ $10.0D+ $8.5E+ $12.0F+ $4.0G $30 $ available ($'000) F G F and G A + B + C + D + E + F + G 4 At least 4 A + B = 1 A and B A, B, C, D, E, F, G = 0, 1 Binary Solution: See file P6-19.XLS. A B C D E F G Selected? (1 = yes) 1 0 0 0 1 1 1 Return $500 $640 $390 $700 $750 $1,000 $300 $2,550.0 6-22. There are 6 binary decision variables (P 1 to P 6 ) corresponding to the six projects. Each variable can take only one of two values: = 1 if the project is chosen, and = 0 if it is not. Objective: Maximize total NPV = Sum of (NPV * Project DV)
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This note was uploaded on 09/21/2009 for the course B 362 taught by Professor Trus during the Spring '09 term at Washington University in St. Louis.

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HW5_Solutions - OSCM 230 Homework 05 HOMEWORK #5 SOLUTIONS...

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