Question

In: Statistics and Probability

Suppose you own a limousine company and consider to purchase three different types of limousines: party...

Suppose you own a limousine company and consider to purchase three different types of limousines: party bus, sedan, and classic limousine.The purchase price will be $50K, $35K and $30K for each types, respectively. You have a maximum budget of $ $1245K. It is estimated that net annual profit from each type of limousine would be $115K, $90K, and $70K. Currently you have 20 drivers that are available to serve in new limousines. If only classic limousines were purchased, your car maintenance facility would be able to handle 30 new classic limousines. However, each sedan limousine is equivalent to 1.5 classic limousines, and each party bus is equivalent to 3 classic limousines in terms of maintenance facility usage.

Formulate an integer program to find out how many of each types of limousine you need to buy to maximize your annual profit.

Solutions

Expert Solution

The given data and the constraints are formulated in an LP in excel as given below. Also the formulas used in each cell must be noted.

Using excel solver to get the optimum solution.

the optimum solution is that the company must buy 20 sedan limousine to earn the max profit.

orchestra answered 2 years ago
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