Question 20 (4 points) The owner of the Consolidated Machine Shop has $10,000 av

Question

Question 20 (4 points) The owner of the Consolidated Machine Shop has $10,000 available to purchase a lathe, a press, a grinder, or some combination thereof. The following 0-1 integer linear programming model has been developed to determine which of the three machines (lathe, x1; press, x2; or grinder, x3) should be purchased in order to maximize annual profit: maximize Z 1,000x 700 800 (profit, ) subject to S5,000 6,000r2 + 4,000t3 10,000 (cost, S) xi, xa, 13 = 0 or 1 Solve this model by using the computer. At the optimal solution, lath will be: 1) 2 2) purchased O 3) not purchased 4) 0

Explanation / Answer

At the optimal solution, x1 = 1, x2 = 0 and x3 = 1. Hence, a lathe and a grinder are puchased and the cost remains less than $10,000.

The profit is maximized, because the profit becomes $1800. Hence, option 2 is correct.

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