Exercise 2: Sensitivity with Excel Solver A corporation plans to build a maximum of 11 new stores in a large city. They will build these stores in one of three sizes for each location a convenience store (open 24 hours), standard store, and an expanded-services store. The convenience store requires $4.125 million to build and 30 employees to operate. The standard store requires $3.25 million to build and 15 employees to operate. The expanded-services store requires $12375 million to build and 45 employees to operate. The corporation can dedicate $82.5 million in construction capital, and 300 employees to staff the stores. On the average, the convenience store nets $1.2 million annually, the standard store nets $2 million annually, and the expanded-services store nets $2.6 million annually. How many of each should they build to maximize revenue? We can formulate this linear programming problem (LPP) as the following: Maxi! = 1. 2X1 +2X2 +2.6X3 Subject to: X1 + X; +33 5: 11 4.125X1 + 8.25X2 + 12.375X3 5 82.5 30X1 + 15X: + 45X3 S 300 X1,X2,X3 2 0 Where: X1 : number of convenience stores X2 : number of standard stores X3 : number of expanded services stores Questions: 1. Interpret the objective function and the constraints. 2. Write the LLP in excel sheet. Solve it with solver and answer the following Questions. 3. How many of each type of store should they build to maximize revenue? 4. What is the value of the maximal revenue? 5. Suppose the prot on standard store is increased to $2.3 million annually. Is the above solution still optimal? What is the value of the objective function? 6. What is the effect of building one expanded services store in total revenue? 7. What is the effect of increasing the maximum number of new stores to 13? Good luck