Workbook 11.3: Example 11-3 ; Lorie-Savage Case.

Excel Work Sheet Setup for Initial Tableau Creation. Solution Shown in Row 6.
Projects
Objective Function Coefficients
$70.27
Period 1Capital Constraint
Period 2 Capital Constraint

X1
14
1
12
3

X2
17
0
54
7

X3
17
1
6
6

X4
15
1
6
2

X5
40
0
30
35

X6
X7
12
14
0.9697 0.0455
6
48
6
4

X8
10
0
36
3

X9
12
1
18
3

Total
Capital
Available
$50
$20

RHS
Values
of the
Constraints
$50
$20

Workbook 11.3: Creation of Solution Tableau for Lorie-Savage LP Problem: Text Table 11.7
"Solver" to be Applied to this worksheet on sheet 3.

Constraint or Objective
Proj 1 Proj 2 Proj 3 Proj 4 Proj 5 Proj 6 Proj 7 Proj 8 Proj 9
Activity Level
0
0
0
0
0
0
0
0
0
Period 1Captl Constraint
12
54
6
6
30
6
48
36
18
Period 2 Captl Constraint
3
7
6
2
35
6
4
3
3
Max project 1
1
Max project 2
1
Max project 3
1
Max project 4
1
Max project 5
1
Max project 6
1
Max project 7
1
Max project 8
1
Max project 9
1
Net Present Value

14

17

17

15

40

12

14

10

12

Resource
Use
Sign
$50
$20

Supply
$50
$20

Microsoft Excel 9.0 Answer Report

Worksheet: [WorkBook 11.3 Linear Programming Lorie Savage Problem.xls]Sheet3
Report Created: 12/13/2001 9:44:01 PM

Target Cell (Max)

Cell
Name
$K$18 Net Present Value Resource Use

Original Value Final Value

$0
$70

Adjustable Cells
Cell
Name
$B$6 Activity Level Proj 1
$C$6 Activity Level Proj 2
$D$6 Activity Level Proj 3
$E$6 Activity Level Proj 4
$F$6 Activity Level Proj 5
$G$6 Activity Level Proj 6
$H$6 Activity Level Proj 7
$I$6
Activity Level Proj 8
$J$6 Activity Level Proj 9

Original Value Final Value

0
1
0
0
0
1
0
1
0
0
0 0.96969697
0 0.045454545
0
0
0
1

Constraints
Cell
Name
$K$7 Period 1Captl Constraint Resource Use
$K$8 Period 2 Captl Constraint Resource Use
$B$6 Activity Level Proj 1
$C$6 Activity Level Proj 2
$D$6 Activity Level Proj 3
$E$6 Activity Level Proj 4
$F$6 Activity Level Proj 5
$G$6 Activity Level Proj 6
$H$6 Activity Level Proj 7
$I$6
Activity Level Proj 8
$J$6 Activity Level Proj 9
$B$6 Activity Level Proj 1
$C$6 Activity Level Proj 2
$D$6 Activity Level Proj 3
$E$6 Activity Level Proj 4
$F$6 Activity Level Proj 5
$G$6 Activity Level Proj 6
$H$6 Activity Level Proj 7
$I$6
Activity Level Proj 8
$J$6 Activity Level Proj 9

Cell Value
$50
$20
1
0
1
1
0
0.9696969697
0.0454545455
0
1
1
0
1
1
0
0.9696969697
0.0454545455
0
1

Formula
$K$7<=$M$7
$K$8<=$M$8
$B$6<=1
$C$6<=1
$D$6<=1
$E$6<=1
$F$6<=1
$G$6<=1
$H$6<=1
$I$6<=1
$J$6<=1
$B$6>=0
$C$6>=0
$D$6>=0
$E$6>=0
$F$6>=0
$G$6>=0
$H$6>=0
$I$6>=0
$J$6>=0

Status
Binding
Binding
Binding
Not Binding
Binding
Binding
Not Binding
Not Binding
Not Binding
Not Binding
Binding
Not Binding
Binding
Not Binding
Not Binding
Binding
Not Binding
Not Binding
Binding
Not Binding

Slack
0
0
0
1
0
0
1
0.03030303
0.954545455
1
0
1
0
1
1
0
0.96969697
0.045454545
0
1

Microsoft Excel 9.0 Sensitivity Report

Worksheet: [WorkBook 11.3 Linear Programming Lorie Savage Problem.xls]Sheet3
Report Created: 12/13/2001 9:44:02 PM

Adjustable Cells
Cell
$B$6
$C$6
$D$6
$E$6
$F$6
$G$6
$H$6
$I$6
$J$6

Name
Activity Level Proj 1
Activity Level Proj 2
Activity Level Proj 3
Activity Level Proj 4
Activity Level Proj 5
Activity Level Proj 6
Activity Level Proj 7
Activity Level Proj 8
Activity Level Proj 9

Final
Value
1
0
1
1
0
0.96969697
0.045454545
0
1

Reduced
Gradient
6.7727272727
-3.409090909
5
10.454545455
-29.31818182
0
0
-0.5
3.9545454545

Constraints
Cell
Name
$K$7 Period 1Captl Constraint Resource Use
$K$8 Period 2 Captl Constraint Resource Use

Final
Value
$50
$20

Lagrange
Multiplier
$0
$2

Microsoft Excel 9.0 Limits Report

Worksheet: [WorkBook 11.3 Linear Programming Lorie Savage Problem.xls]Sheet3
Report Created: 12/13/2001 9:44:02 PM

Target
Cell
Name
$K$18 Net Present Value Resource Use

Cell
$B$6
$C$6
$D$6
$E$6
$F$6
$G$6
$H$6
$I$6
$J$6

Adjustable
Name
Activity Level Proj 1
Activity Level Proj 2
Activity Level Proj 3
Activity Level Proj 4
Activity Level Proj 5
Activity Level Proj 6
Activity Level Proj 7
Activity Level Proj 8
Activity Level Proj 9

Value
$70

Value
1
0
1
1
0
0.96969697
0.045454545
0
1

Lower Target
Limit Result
0 56.27
0 70.27
0 53.27
0 55.27
0 70.27
0 58.64
0 69.64
0 70.27
0 58.27

Upper
Limit
1
0
1
1
0
0.96969697
0.045454545
0
1

Target
Result
70.27
70.27
70.27
70.27
70.27
70.27
70.27
70.27
70.27

Workbook 11.3: Solution Tableau for Lorie-Savage LP Problem: Text Table 11.7
Project Portfolio Selectipn Problem

Constraint or Objective
Activity Level: Chosen
Period 1Captl Constraint
Period 2 Captl Constraint
Max project 1
Max project 2
Max project 3
Max project 4
Max project 5
Max project 6
Max project 7
Max project 8
Max project 9
Net Present Value

Resource
Proj 1 Proj 2 Proj 3 Proj 4 Proj 5 Proj 6 Proj 7 Proj 8 Proj 9 Use
Sign
1
0
1
1
0
0.97 0.045
0
1
12
54
6
6
30
6
48
36
18
$50

3
7
6
2
35
6
4
3
3
$20

1
1.0000

1
0.0000

1
1.0000

1
1.0000

1
0.0000

1
0.9697

0.0455
1
0.0000

1 1.0000

14
17
17
15
40
12
14
10
12 $70.27
Column "K" shows the proportion of each project chosen in the optimal solution,
and the total NPV of the chosen projects, which equals
$70.27

Note: the "signs" in column L are for display purposes only.

Signs for computation are set up in the "Solver" dialog box.

Supply
$50
$20

optimal solution,

Optimum solution to WkBk 11.3 LS problem

Page 11

0.96969697

Optimum solution to WkBk 11.3 LS problem

0.045454545

Page 12