solution

Consider a capital budgeting example with five projects from which to select. Let Xi = 1 if project i is selected, 0 if not, for i = 1,2,3,4,5. Projects cost are $100, $200, $150, $75, and $300, respectively. Suppose that the budget is $450. Consider the following requirements: -Choose at least 3 projects, -If project 3 is chosen, project 4 must not be chosen, and – If project 1 is chosen, project 5 must not be chosen. Based on the given information answer the following questions: a) Formulate the integer programming model. b) Introduce slack/surplus/artificial variables and prepare LP model in a standard form. c) Use the standard form of LP given in part (b) to constract the initial simplex tableau and fill in all cell values.