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LP 2abc

This problem from a textbook involves using Excel and the Solver add-in to determine the optimal selection of video game development projects given a budget of $950,000 and 20 available programmers, with the goal of maximizing total net present value. The document provides a table listing 7 potential projects with their required programmers, capital needs, and estimated net present values. Students are asked to formulate the problem algebraically, implement it as a spreadsheet model in Excel using Solver, and analyze the optimal solution.

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418 views1 page

LP 2abc

This problem from a textbook involves using Excel and the Solver add-in to determine the optimal selection of video game development projects given a budget of $950,000 and 20 available programmers, with the goal of maximizing total net present value. The document provides a table listing 7 potential projects with their required programmers, capital needs, and estimated net present values. Students are asked to formulate the problem algebraically, implement it as a spreadsheet model in Excel using Solver, and analyze the optimal solution.

Uploaded by

majka077677
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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IP Algebraic and Spreadsheet Model:

This problem is based on (but not exactly) number 13 in Chapter 6 of Cliff Ragsdale’s
textbook, “Spreadsheet Modeling and Decision Analysis”.

This problem requires the use of Excel and the add-in, called Solver. The course is
Excel-based and Solver is the optimization application used for all problems.

The problem appears in this text box and is also attached as a MS Word file, so it is sure
to transmit legibly. The MS Word version will likely need to be the document from
which to work, as the text box does not allow information to be transmitted well (see
attached MS Word doc below).

A developer of video game software has seven proposals for new games. Unfortunately,
the company cannot develop all the proposals because its budget for new projects is
limited to $950,000 and it has only 20 programmers to assign to new projects. The
financial requirements, returns, and the number of programmers required by each project
are summarized in the following table. Projects 2 and 6 require specialized programming
knowledge that only one of the programmers has. Both of these projects cannot be
assigned to only one of the projects. (Note: All dollar amounts represent thousands.)

Project Programmers Capital Required Estimated NPV


Required
1 7 $250 $650
2 6 $175 $550
3 9 $300 $600
4 5 $150 $450
5 6 $145 $375
6 4 $160 $525
7 8 $325 $750

a) Provide a complete algebraic formulation.


b) Implement spreadsheet in Excel and use Solver to identify optimal solution.
c) Analyze and explain the solution obtained.

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