Capital Budgeting Model
Decision Variables
Project P1 P2 P3 P4 P5
Accept 0 0 1 0 1
Objective Function
NPV 2 3.6 3.2 1.6 2.8 6
Constraints
Expenditures 12 24 20 8 16 36 <=
0 1 0 0 1 1 >=
0 1 0 0 1 1 <=
0 0 1 0 -1 0 >=
P2 & P5 have international impact,
in the project portfolio at least one
of these should be included
Budget
40 Expenditure <= 40
1 Choose at least one international impact project (P2+P5>=1)
1 P2 + P5 Mutually exclusive, P2+P5<=1
0 P5 requires P3, P3-P5>=0
Item Weight Value Take?
A 12 4 0
B 1 2 1
C 4 10 1
D 1 1 1
E 2 2 1
Total Weight of Items Taken 8
Weight Limit 15 kg
Total Value 15 kg
Network Transportation Problem
Parameters To (Warehouse)
From (Plant) Atl Bos Chi Den Capaciy
Minn $ 0.60 $ 0.56 $ 0.22 $ 0.40 10,000
Pit $ 0.36 $ 0.30 $ 0.28 $ 0.58 15,000
Tucs $ 0.65 $ 0.68 $ 0.55 $ 0.42 15,000
Demand 8,000 10,000 12,000 9,000
Decisions
Atl Bos Chi Den Sent
Minn 0 0 10000 0 10,000
Pit 5000 10000 0 0 15,000
Tucs 3000 0 2000 9000 14,000
Received 8,000 10,000 12,000 9,000 39,000
Objective Constraints
Total Cost $ 13,830 Received>Demand
Sent<Capacity
Assignment Problem
PARAMETERS
Compact Coupé Sedan SUV Truck Van
Plant 1 2 3 4 5 6
Akron $ 80 $ 56 $ 43 $ 62 $ 46 $ 58
Buffalo $ 94 $ 50 $ 88 $ 64 $ 63 $ 52
Columbus $ 94 $ 46 $ 50 $ 40 $ 55 $ 73
Detroit $ 98 $ 79 $ 71 $ 65 $ 91 $ 59
Evansville $ 61 $ 39 $ 89 $ 98 $ 45 $ 52
Flint $ 77 $ 49 $ 65 $ 95 $ 72 $ 91
DECISIONS
Compact Coupé Sedan SUV Truck Van
Plant 1 2 3 4 5 6
Akron 0 0 1 0 0 0
Buffalo 0 1 0 0 0 0
Columbus 0 0 0 1 0 0
Detroit 0 0 0 0 0 1
Evansville 0 0 0 0 1 0
Flint 1 0 0 0 0 0
Product Constraint 1 1 1 1 1 1
OBJECTIVE FUNCTION $ 314 Constraint
Plant contraint <= 1
Product contraint >= 1
Plant Constraint
1
1
1
1
1
1
Network: TransShipment Model
Capacity lb/fertilizer
Cost $/lb
Stage 1 PARAMETERS DECISIONS
To Distribution Center
From Plant D1 D2 Capacity D1 D2
P1 $ 1.36 $ 1.28 2400 1100 1300
P2 $ 1.28 $ 1.35 2750 2750 0
P3 $ 1.68 $ 1.55 2500 0 1950
Stage Cost $ 9,703 3850 3250
Stage 2 PARAMETERS DECISIONS
To Distribution Center D1 D2
To D1 D2 Demand 3850 3250
W1 $ 1 $ 1 $ 1,250 1250 0
W2 $ 0 $ 1 $ 1,000 1000 0
W3 $ 0 $ 0 $ 1,600 1600 0
W4 $ 0 $ 0 $ 1,750 0 1750
W5 $ 1 $ 1 $ 1,500 0 1500
Stage Cost $ 3,147
OBJECTIVE
Total Cost $ 12,850 Constraints
LT for Capacities
GT for Demand
Flow in = Flow Out for DCs
Sent
2400
2750
1950
Received
1250
1000
1600
1750
1500
Network: Transportation Problem
Balance Equation Model
Decision Variables
MA MB MC MD MN PA PB
0 0 10000 0 0 5000 10000
Objective Function
0.6 0.56 0.22 0.4 0 0.36 0.3
Constraints
Mcap 1 1 1 1 1 0 0
Pcap 0 0 0 0 0 1 1
Tcap 0 0 0 0 0 0 0
Admd -1 0 0 0 0 -1 0
Bdmd 0 -1 0 0 0 0 -1
Cdmd 0 0 -1 0 0 0 0
Ddmd 0 0 0 -1 0 0 0
Ndmd 0 0 0 0 -1 0 0
PC PD PN TA TB TC TD TN
0 0 0 3000 0 2000 9000 1000
0.28 0.58 0 0.65 0.68 0.55 0.42 0
0 0 0 0 0 0 0 0
1 1 1 0 0 0 0 0
0 0 0 1 1 1 1 1
0 0 0 -1 0 0 0 0
0 0 0 0 -1 0 0 0
-1 0 0 0 0 -1 0 0
0 -1 0 0 0 0 -1 0
0 0 -1 0 0 0 0 -1
Total Cost
$ 13,830
Net Flow Rqd Flow
10000 = 10000
15000 = 15000
15000 = 15000
-8000 = -8000
-10000 = -10000
-12000 = -12000
-9000 = -9000
-1000 = -1000