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Tio Ieoper2 Hw1

The document contains 4 problems involving capital budgeting and production planning. Problem 1 involves allocating a budget among 4 projects with different costs and returns under space and number constraints. Problem 2 involves allocating assembly and painting hours among chair, big table and little table production to maximize profit. Problem 3 involves allocating production hours among 4 cough syrups with different returns and setup costs. Problem 4 involves selecting the optimal location for a new factory and warehouse from two cities under a capital budget constraint.

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168 views1 page

Tio Ieoper2 Hw1

The document contains 4 problems involving capital budgeting and production planning. Problem 1 involves allocating a budget among 4 projects with different costs and returns under space and number constraints. Problem 2 involves allocating assembly and painting hours among chair, big table and little table production to maximize profit. Problem 3 involves allocating production hours among 4 cough syrups with different returns and setup costs. Problem 4 involves selecting the optimal location for a new factory and warehouse from two cities under a capital budget constraint.

Uploaded by

Hannah Tio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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HW1

Tuesday, October 26, 2021 11:52 AM

5. The Davis Company is trying to determine how to allocate P100000 among four
proposed capital projects. Project 1 requires P20000, Project 2 requires P30000,
Project 3 requires P50000, and Project 4 requires P25000. There is also a space
limitation of 27,000 square feet. Projects 1 through 4 require 12000, 5000, 18000,
and 10000 square feet, respectively. Discounted cash return for Project 1 is
P5000, for Project 2 is P7000, for Project 3 is P10000, and for Project 4 is P4000.
There is an additional requirement that no more than three projects be
undertaken. The object is to choose the projects that will maximize discounted
cash return.

6. The Redfield Company manufactures three products: chairs, big tables, and
little tables. Each chair requires 2 hours in the assembly room and 4 hours in the
painting center. Each big table requires 4 hours in assembly and 2 hours in
painting. The corresponding values for little tables are 3 hours and 2 hours. The
company has available 180 hours of assembly time and 200 hours of painting
time. Contribution to profit is P8 for each chair, P10 for each big table, and P7
for each little table. There is a requirement that at least 50 tables (big and/or
little) be produced or no tables be produced. The objective is to maximize profit
contribution.

8. The Whiting Company manufactures four types of cough syrup, which


contribute P7, P8, P9, and P6, respectively to profit. There is a setup cost of P400
associated with each of the first two cough syrups. There is no setup cost for the
third and fourth cough syrups. During the next production period, the company
has 8000 hours of production time available. Each gallon of cough syrup 1
requires 2.3 hours of production time. The corresponding values for products 2, 3,
and 4 are 4.2 hours, 2.7 hours, and 3.0 hours. Setups do not consume production
time. The objective is to maximize profit contribution.

9. A certain manufacturing company has decided to expand by building a new


factory in A or B. It is also considering building a new warehouse in whichever
city is selected for the new factory. The net present values of these alternatives,
including construction costs, are shown below.

The total capital available is P250 Million. (a) Formulate the ILP model for this
problem. (b) An inspection of the information would reveal that this problem
can be solved by common sense. What is the optimal solution.

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