OI 01 Linear Programming
OI 01 Linear Programming
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Linear programming
Maureen Laird is the chief financial officer for the Alva Electric Co., a
major public utility in the midwest. The company has scheduled the
construction of new hydroelectric plants 5, 10, and 20 years from now
to meet the needs of the growing population in the region served by
the company. To cover at least the construction costs, Maureen needs
to invest some of the companys money now to meet these future
cash-flow needs. Maureen may purchase only three kinds of financial
assets, each of which costs $1 million per unit. Fractional units may be
purchased. The assets produce income 5, 10, and 20 years from now,
and that income is needed to cover at least minimum cash-flow
requirements in those years. (Any excess income above the minimum
requirement for each time period will be used to increase dividend
payments to shareholders rather than saving it to help meet the
minimum cash-flow requirement in the next time period.)
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Linear programming
(d)Use the Excel Solver to solve the model by the simplex method.
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