Formulate and Solve Optimization Models with Binary Variables and Logical

question 41

Multiple Choice

Formulate and solve optimization models with binary variables and logical constraints.
Use the table below to answer the following question(s) by invoking the binary constraints on the variables using the standard Solver.
Below is the spreadsheet for a project selection model: $\begin{array}{|l|l|l|l|l|l|l|l|}\hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } & \text { G } \\\hline & \text { Project Selection } & & & & & & \\1 & \text { Model } & & & & & & \\\hline 2 & & & & & & & \\\hline 3 & \text { Data } & & & & & & \\\hline 4 & & & & & & & \text { Available } \\ & & \text { Project 1 } & \text { Project 2 } & \text { Project 3 } & \text { Project 4 } & \text { Project 5 } & \text { Resources } \\\hline 5 & \begin{array}{l}\text { Expected Return } \\(\mathrm{NPV}) \end{array} & \$ 160,000 & \$ 200,000 & \$ 125,000 & \$ 150,000 & \$ 225,000 \\\hline 6 & \begin{array}{l}\text { Cash } \\\text { requirements }\end{array} & \$ 45,000 & \$ 70,000 & \$ 28,000 & \$ 52,000 & \$ 65,000 &\$175,000\\\hline 7 & \begin{array}{l}\text { Personnel } \\\text { requirements }\end{array} & 7 & 4 & 2 & 6 & 4 & 10 \\\hline 8 & & & & & & & \\\hline 9 & \text { Model } \\\hline 10 & \\\hline 11 & \begin{array}{l}\text { Project selection } \\\text { decisions }\end{array} \\\hline 12 & \text { Cash Used } \\\hline 13 & \text { Personnel Used } \\\hline 14 & \text { Return } \\\hline\end{array}$
-What is the amount of cash used for Project 2?

• A) $ 105,000
• B) $ 25,000
• C) $ 115,000
• D) $ 70,000

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Definitions:

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of money, calculated on an annual basis.

Gnome Molds

The forms or templates used for the creation of gnome figurines, typically made from materials like plastic, silicone, or metal.

Plaster

Plaster is a building material used for coating, protecting, and decorating walls and ceilings; it can also refer to medical or artistic uses.

Labor

Labor refers to the use of both physical and mental human efforts in creating goods and services.