Kloos Industries Has Projected the Availability of Capital Over Each

question 11

Essay

Kloos Industries has projected the availability of capital over each of the next three years to be $850,000,$1,000,000,and $1,200,000,respectively.It is considering four options for the disposition of the capital:
a.Research and development of a promising new product
b.Plant expansion
c.Modernization of its current facilities
d.Investment in a valuable piece of nearby real estate
​
Monies not invested in these projects in a given year will NOT be available for the following year's investment in the projects.The expected benefits three years hence from each of the four projects and the yearly capital outlays of the four options are summarized in the table below in millions of dollars.
In addition,Kloos has decided to undertake exactly two of the projects.If plant expansion is selected,it will also modernize its current facilities.
​
Formulate and solve this problem as a binary programming problem.

---

Definitions:

Ballpark Estimate

An approximate calculation or rough assessment, often used in the early stages of planning or decision-making.

Ishikawa Diagram

A tool, also known as a fishbone diagram, used to identify and analyze the causes of a particular problem or effect.

Milestone Schedule

A plan that outlines the key milestones or significant points within a project’s timeline, providing a clear pathway to project completion.

Project Management Skills

The competencies, such as leadership, communication, and problem-solving, required to successfully lead and deliver projects.