Management Science

43 x 1 144023 budget obj8000parking obj1 parking

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Unformatted text preview: y back the capital investment in trucks? Monthly save = $57,257.1 Number of months to recover the capital investment = 380000($ available to purchase trucks)/57257.1 = 6.637 4.) 1. Suppose Consolidated could use part of its capital budget to build new parking spaces, at $5000 per space. Doing so would reduce the budget by $5000 but increase the number of spaces by 1. What would be the change in monthly operating cost (objective function)? Is it worthwhile to pursue? Using shadow prices, the change in monthly operating cost (objective function) would be: (–$0.1086) (–$5000) + (–$571.43) (1) = –$28.43 Since it is negative, which means it will reduce the monthly operating cost. Hence it is worthwhile to pursue 2). Suppose Consolidated management team has...
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This test prep was uploaded on 04/02/2014 for the course MGT 2251 taught by Professor Chang during the Fall '08 term at Georgia Tech.

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