Case Problem 3

Case Problem 3: Hart Venture Capital
1. Let S = fraction of the Security Systems project funded by HVC
M = fraction of the Market Analysis project funded by HVC

Max 1,800,000S + 1,600,000M
s.t.

600,000S + 500,000M ≤ 800,000 Year 1
600,000S + 350,000M ≤ 700,000 Year 2
250,000S + 400,000M ≤ 500,000 Year 3
S ≤ 1 Maximum for S
M ≤ 1 Maximum for M
S,M ≥ 0

The solution obtained using The Management Scientist software package is shown below:

OPTIMAL SOLUTION

Objective Function Value = 2486956.522

Variable Value Reduced Costs
-------------- --------------- ------------------
S 0.609 0.000
M 0.870 0.000

Constraint Slack/Surplus Dual Prices
-------------- --------------- ------------------
1 0.000 2.783
2 30434.783 0.000
3 0.000 0.522
4 0.391 0.000
5 0.130 0.000

OBJECTIVE COEFFICIENT RANGES

Variable Lower Limit Current Value Upper Limit
------------ --------------- --------------- --------------- S No Lower Limit
1800000.000 No Upper Limit M No Lower Limit 1600000.000 No Upper Limit

RIGHT HAND SIDE RANGES

Constraint Lower Limit Current Value Upper Limit
------------ --------------- --------------- ---------------
1 No Lower Limit 800000.000 822950.820
2 669565.217 700000.000 No Upper Limit
3 461111.111 500000.000