Answer the following question base on the information provided:

An investor owns twelve Subway franchises and wants to evaluate the efficiency of each in order to make a decision of either selling the least efficient or investing more capital to increase its efficiency. The twelve restaurants are in different areas of Philadelphia, but all have the same overall market.

Use the information below to answer the following questions.

Question 1:

If the LINDO formulation and output of store 4 is shown below, what is the efficiency value of store 4?

Store 4

MAX 50000U1+6U2

S.T.

85000U1+8U2-1500V1-12000V2-800V3

65000U1+9U2-2500V1-10000V2-800V3

60000U1+6U2-1000V1-15000V2-700V3

50000U1+6U2-1000V1-10000V2-900V3

50000U1+6U2-2000V1-8000V2-600V3

80000U1+6U2-2200V1-7000V2-1000V3

90000U1+7U2-1500V1-13000V2-1000V3

50000U1+9U2-2800V1-10000V2-800V3

40000U1+8U2-1100V1-14000V2-900V3

40000U1+9U2-1700V1-13000V2-700V3

50000U1+7U2-1000V1-12000V2-1100V3

55000U1+9U2-1800V1-15000V2-1000V3

1000V1+10000V2+900V3=1

U1 > 0

U2 > 0

V1 > 0

V2 > 0

V3 > 0

OBJECTIVE FUNCTION VALUE

1. 0.9710000

Variable Value Reduced Cost

U1 0.1000000E-05 0.000000

U2 0.1535000 0.000000

V1 0.3776000E-03 0.000000

V2 0.6215000E-04 0.000000

V3 0.1000000E-05 0.000000

Row Slack or Surplus Dual Price

1 0.9710000 1.000000

2 0.000000 0.3243243

3 0.1198000 0.000000

4 0.3295500 0.000000

5 0.2900000E-01 0.000000

6 0.2820000 0.000000

7 0.2657700 0.000000

8 0.2108500 0.000000

9 0.2480800 0.000000

10 0.1836000E-01 0.000000

11 0.2907000E-01 0.000000

12 0.000000 0.4864865

13 0.1764300 0.000000

14 0.000000 0.9729730

15 0.000000 -1891.892

16 0.1534990 0.000000

17 0.3766000E-03 0.000000

18 0.6115000E-04 0.000000

19 0.000000 -81.08108

		0
		0.971.
		1.00
		Cannot be determined with the current information.

Question 2:

Which of the following statements is correct about Us and Vs.

		The values of U1, U2, V1, V2, and V3 are the inputs and outputs of various DMUs
		The values of U1, U2, V1, V2, and V3 are constant for all DMUs.
		The values of U1, U2, V1, V2, and V3 are weights assigned by computer each input and output for each DMU.
		The values of U1, U2, V1, V2, and V3 can be equal to zero.

Question 3:

In question (9) in order to make store 4 efficient, which stores must be referenced (Benchmarked)?

		Store 1, Store 2
		Store 1, Store 2, Store 7
		Store 1, Store 11
		Store 7, Store12, Store 11

Question 4:

What will be the values of INPUTS for store 4 if it is made to be efficient?

		260.78, 5740.15, 630.50
		324.322, 5694.0, 793.11
		1494.63, 7416.20, 556.21
		972.973, 9729.73, 794.59

Question 5:

What will be the values of OUTPUTS for Store 4 if it is made to be efficient?

		90132.56, 9
		50000, 6
		51891.89, 6
		50000, 5,

Location Advertising Labor cost Customer Mortgage Profit Satisfaction 1 1500 12000 800 85000 8 2 2500 10000 800 65000 9 3 1000 15000 700 60000 6 4 1000 10000 900 50000 6 5 2000 8000 600 50000 6 6 2200 7000 1000 80000 6 7 1500 13000 1000 90000 7 8 2800 10000 800 50000 9 9 1100 14000 900 40000 8 10 1700 13000 700 40000 9 11 1000 12000 1100 50000 7 12 1800 15000 1000 55000 9 Location Advertising Labor cost Customer Mortgage Profit Satisfaction 1 1500 12000 800 85000 8 2 2500 10000 800 65000 9 3 1000 15000 700 60000 6 4 1000 10000 900 50000 6 5 2000 8000 600 50000 6 6 2200 7000 1000 80000 6 7 1500 13000 1000 90000 7 8 2800 10000 800 50000 9 9 1100 14000 900 40000 8 10 1700 13000 700 40000 9 11 1000 12000 1100 50000 7 12 1800 15000 1000 55000 9