Analyze the sensitivity of the optimal solution for Riesemberg Medical Devices (Problem 14.11) as the budget and available engineers are varied. Write a short summary memo to the manager in which you outline the results and make recommendations.

Data from Problem 14.11

Riesemberg Medical Devices is allocating next year’s budget among its divisions. As a result, the R&D Division needs to determine which R&D projects to fund. Each project requires various software and hardware and consulting expenses, along with internal human resources. A budget allocation of $1,300,000 has been approved, and 35 engineers are available to work on the projects. The R&D group has determined that at most one of projects 1 and 2 should be pursued, and that if project 4 is chosen, then project 2 must also be chosen. Develop a model to select the best projects within the budget. 

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Project NPV 1 2 3 4 5 6 7 $600,000 580,000 550,000 400,000 650,000 725,000 340,000 Internal Additional Engineers Costs 9 $196,000 4 400,000 7 12 8 10 8 70,000 180,000 225,000 200,000 130,000