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ID: 380134 • Letter: P

Question

Please do not paste the picture that it’s already on chegg to this question. I need new solution. The Sunrise Company is cash outflow at the present time for each six new projects. The epedtra) project are given in the table below Project #4 At present, a maximum of $20,000 fand is available for new projects Sunrise has some requireneess projects. These requirements are described in details below Formulae an he wpojets for th whose solution will tell Sunrise how to maximize the total expected NP 1) Define the decision variables 2) Write the objective. 3) Write the constraints a) Constraint on the total cash outflow b) At least three projects must be undertaken Exactly two of the projects 1, 3,4, and 6 must be undertaken o If project 2 is undertaken, projects I and 3 also must be undertaken e) Itproject 4 is undertaken, project 5 cannot be undertaken D Projects 3 or 4 must be undertaken. Ir project 1 is undertaken, projects S or 6 must be undertaken traints on decision variables.

Explanation / Answer

1. Decision Variables:

Let x1,x2,x3,x4,x5 and x6 represent the binary variables indicating the decisions of choosing the 6 new projects respectively.

x1=1 if project #1 is chosen and 0 if project#1 is not chosen. And so on

2. Objective function:

Maximize Total Expected NPV

total Expected NPV=10000x1+16000x2+6000x3+9000x4+20000x5_18000x6

3. constraints:

a. available funds = 20000

hence, total cash outflow<=available funds

3000x1+5000x2+2000x3+4000x4+7000x5+6000x6<=20000

b. x1+x2+x3+x4+x5+x6>=3

c. x1+x3+x4+x6=2

d. x1+x3>x2

e. x4+x5<=1

f. x3+x4>=1

g. x5+x6>x1

4. x1,x2,x3,x4,x5,x6=bin