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Caspian Seafoods Has Recently Purchased a Very Large Property for Possible

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Essay

Caspian Seafoods has recently purchased a very large property for possible expansion of its business.On this property, Caspian may construct a large plant (X1) or a small plant (X2).In addition, if, and only if, it constructs either plant, it may or may not choose to build a warehouse (X3) as well.That is, no plant also means no warehouse.Caspian has other expansion opportunities as well, and is using binary (0 - 1) programming for evaluation.Write a linear constraint (or constraints) that adequately and appropriately reflects the stated conditions on X1, X2, and X3 under binary programming.


Definitions:

Materiality

A company-specific aspect of relevance. An item is material when its size makes it likely to influence the decision of an investor or creditor.

Activity Level

An indicator of the volume of business activity or operations in a specific period, often used in costing and budgeting to measure performance.

Fixed Costs

Costs that remain constant in total regardless of changes in the level of activity within a relevant range.

Static Budget

A budget that is based on fixed assumptions and does not change with variations in business activity levels.

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