73-220-Lecture16 - IntegerProgramming:Applications 73-220...

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1 Integer Programming: Applications 73-220 Lecture 16
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2 Agenda Review of last class. Applications of using binary decision variables. More IP applications Capital budgeting Fixed cost Distribution design Next Class
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3 Capital Budgeting: I Julie Schwasher, the Vice President of Finance for a  major appliance manufacturer, has before her eight  investment proposals submitted by various segments  of the company for her approval or rejection. The  columns of the table on the next slide summarize each  proposal’s net present value (NPV) and capital  requirements for each of the next five years. Although  Julie finds all of the proposals attractive, she must  reject some because of the limited capital.  Julie’s  objective is to maximize the total NPV of the approved  proposals.
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4 Capital Budgeting: II 1 2 3 4 5 6 7 8 Available Capital ($000) NPV ($000) 151
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This note was uploaded on 11/28/2011 for the course FINANCE 101 taught by Professor Chan during the Spring '11 term at Aarhus Universitet.

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73-220-Lecture16 - IntegerProgramming:Applications 73-220...

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