Riker Cois Considering Which of 4 Different Projects to Undertake in in Order

question 16

Multiple Choice

Riker Co.is considering which of 4 different projects to undertake in order to maximize its net present value (NPV) .Define Xi as a binary variable that equals 1 if project i is undertaken and 0 otherwise,for i = 1,2,3,4.The NPV and required capital (in millions) for each project are listed below.
What is the proper objective function?

• A)Max X1 + X2 + X3 + X4
• B)Min 60X1 + 50X2 + 40X3 + 20X4
• C)Max 60X1 + 50X2 + 40X3 + 20X4
• D)Max 7X1 + 10X2 + 6X3 + 3X4
• E)Max 170(X1 + X2 + X3 + X4)

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Definitions:

Demand Variability

The extent to which demand can fluctuate over a period of time, impacting inventory management and planning processes.

High Utilization

Refers to the extent to which a company's resources, such as workers or equipment, are being used at or near their maximum capacity.

Demand Fluctuations

Variations in the quantity of a product or service desired by consumers, often influenced by seasonality, trends, or economic factors.

Seasonal Inventory

Stock that is kept to meet the seasonal demand of products, which can vary throughout the year based on changes in customer behavior or events.