Table 10-1 a Company Has Decided to Use 0-1 Integer Programming to Programming

question 51

Multiple Choice

Table 10-1
A company has decided to use 0-1 integer programming to help make some investment decisions.There are three possible investment alternatives from which to choose,but if it is decided that a particular alternative is to be selected,the entire cost of that alternative will be incurred (i.e. ,it is impossible to build one-half of a factory) .The integer programming model is as follows:
Maximize 5000 X₁ + 7000X₂ + 9000X₃
Subject to: X₁ + X₂ + X₃ ≤ 2 (only 2 may be chosen)
25000X₁ + 32000X₂ + 29000X₃ ≤ 62,000 (budget limit)
16 X₁ + 14 X₂ + 19 X₃ ≤ 36 (resource limitation)
all variables = 0 or 1
where X₁ = 1 if alternative 1 is selected,0 otherwise
X₂ = 1 if alternative 2 is selected,0 otherwise
X₃ = 1 if alternative 3 is selected,0 otherwise
The optimal solution is X₁ = 0,X₂ = 1,X₃ = 1
-According to Table 10-1,which presents an integer programming problem,if the optimal solution is used,what would the value of the objective function be?

• A)21,000
• B)12,000
• C)16,000
• D)2
• E)None of the above

---

Definitions:

Revenue

The total amount of money received by a company from its business activities, such as sales of goods or services, before any expenses are subtracted.

Expense Accounts

Accounts used to record transactions relating to expenses incurred by a business, such as costs for materials, utilities, and salaries.

Common Stock

Equity securities representing ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Trial Balance

An accounting report that lists the balances of all ledgers accounts to check the mathematical accuracy of the bookkeeping system.