COMM 163 (Fall 2013)

School of Business
Queen's University

Solutions to Assignment 1
Problem 1: Production of Bookcases
1. Decisions:
S - # of standard cases made, N - # narrow cases made, W - # of wide cases made
2. Objective:
Maximize Profit = 8S + 6N + 10W
3. Constraints:
I. Resource Availability
0.2S + 0.4N + 0.6W 150

(trimmer)

0.6S + 0.2N + 0.5W 150

(shaper)

0.4S + 0.4N + 0.4W 600

(assembly)

II. Non-negativity
S,N,W 0

Problem 2: Rabbits and Chickens

1. Decisions:
R - # of rabbits to raise, C - # chickens to raise
2. Objective:
Maximize profit = 15R + 24C
(60 week planning horizon 3 groups of rabbits for per rabbit revenue of $75 and cost of $60 and 4
groups of chickens for per chicken revenue of $60 and cost of $36)
3. Constraints:
I. Resources
2R + 0.5C 12

(Balcony space)

R + 0.6C 4.6

(Weekly budget)

II. Ratio of rabbits to chickens

R 4C 0
III. Non-negativity
R,C 0

Problem 3: Investment Decision

1. Decisions:
x1 the amount invested in Asset 1 (millions)
x2 the amount invested in Asset 2 (millions)
x3 the amount invested in Asset 3 (millions)
2. Objective:
Minimize Total Amount Invested = x1 + x2+ x3
3. Constraints:
2x1 + x2 +0.5x3

400

(5 year cash requirement)

0.5x1 + 0.5x2 + 1x3

100

(10 year cash requirement)

300

(15 year cash requirement)

1.5x2 + 2x3
x1, x2 , x3

(non-negativity)

Question 2 graphical solution