Management Science

Shade in feasible region 3 identify corner points 4

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Unformatted text preview: proposed to build additional parking and dock space, and to authorize an increase of $8000 to the equipment budget for each additional space. How much would this save in monthly operating cost (objective function)? With this way, how much time is required to pay back the additional investment in each new parking space? For each additional parking space and $8000 increase of equipment budget, by using current shadow prices, each additional space would change the objective function by: (–$0.1086 x $8000) + (–$571.43 x 1) = –$1440.23 (Budget OBJ*$8000)+(Parking OBJ*1 parking space) The payback periods for each investment is = 8000/1440.23 = 5.55 months The optimal solution suggests not purchasing any pickup trucks, i.e. solution value equals to 0. How much does the...
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