14 HAL computer must determine which of seven research and development (R&D) projects to undertake. For each project four quantities are of interest:

a the net present value (NPV in millions of dollars) of the project b the annual growth rate in sales generated by the project c the probability that the project will succeed d the cost (in millions of dollars) of the project The relevant information is given in Table 69. HAL has set the following four goals:

Goal 1 The total NPV of all chosen projects should be at least $200 million.

Goal 2 The average probability of success for all projects chosen should be at least .75.

Goal 3 The average growth rate of all projects chosen should be at least 15%.
Goal 4 The total cost of all chosen projects should be at most $1 billion.
For the following sets of priorities, use preemptive (integer)
goal programming to determine which projects should be selected.
Priority Set 1 2>>> 4>>> 1>>> 3 Priority Set 2 1>>> 3>>> 4>>> 2

Transcribed Image Text:

TABLE 69 NPV Annual Growth Probability Cost Project (in millions) Rate of Success (in millions) 12 1 40 20 .75 220 30 16 .70 140 3 60 12 .75 280 4567 45 8 .90 240 5 55 18 6 40 18 7 90 19 889 .65 300 .60 200 .65 440