Use the Information Below to Answer the Following Questions

question 8

Essay

Use the information below to answer the following questions.
A real estate developer is planning to build an office complex.Currently,there are three office sizes under consideration: small,medium,and large.Small offices can be rented for $600 per month,medium offices can be rented for $750 per month,and large offices can be rented for $1000 per month.Each small office requires 600 square feet,each medium office requires 800 square feet,and each large office requires 1000 square feet.The current plot of land available to the developer is 100,000 square feet.The developer wants to ensure that the office complex has at least 3 units of each office size.Moreover,zoning restrictions limit the total number of offices to 50.

-Use the Sensitivity Report to answer the following questions:
a.Suppose that the square footage available to the developer increases to 110,000 square feet.What impact would this have on the optimal objective function value?
b.Suppose that the minimal number of small officers that the developer needs to build must be at least 5 offices.What impact would this have on the optimal objective function value?
c.Suppose that the monthly rental of small offices increases to $650,and that the monthly rental of medium offices increases to $800.What impact will this have on the current optimal solution and the objective function value?
d.Suppose that the total number of offices increases to a maximum of 55,and the minimum number of medium offices increases to 5.What impact would this have on the current optimal objective function value?

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Definitions:

Customer Location

Refers to the geographical area where a company's potential or actual customers are situated.

Divisions Defined

The categorization and separation of organizational tasks or functions into distinct units for management purposes.

Transfer-Pricing

The pricing of goods, services, and intangible property bought and sold by operating units or divisions within the same company.

Profit Centers

Divisions or segments of a business that are directly responsible for generating its profits.