Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A company has $1.2 million to allocate to the following budget requests from five departments: Dept. 1 Dept. 2 Dept. 3 Dept. 4 Dept. 5
A company has $1.2 million to allocate to the following budget requests from five departments: Dept. 1 Dept. 2 Dept. 3 Dept. 4 Dept. 5 $450,000 210,000 $285,000 $197,500 128,000 Because the total budget requests exceed the available $1.2 million, not all the requests can be satisfied. Suppose the CFO considers the requests for departments 2 and 4 to be twice as important as those from departments 3 and 5, and the request from department 1 to be twice as important as those from departments 2 and 4. Further, suppose the CFO wants to make sure each department receives at least 70% of the requested amount. a. Formulate a GP model for this problem. b. Implement your model and solve it. What is the optimal solution? c. Suppose CFO is willing to allocate more than $1.2 million to these budgets but regards exceeding the $1.2 million figure as being twice as undesirable as not meeting the budget request for department 1. What is the optimal solution? d. Suppose CFO regards all deviations from the original budget amounts (including the $1.2 million available) to be equally undesirable. What solution minimizes the maximum percentage deviation from the budgeted amounts
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started