EZ Storage would like to expand its successful business into a neighboring town. In doing so, the company must determine how many storage rooms
EZ Storage would like to expand its successful business into a neighboring town. In doing so, the company must determine how many storage rooms of each size to build. The problem has been formulated as a linear program (LP), as follows: maximize Z 120x1 + 100x2 (monthly earnings) 800 (advertising budget) subject to: 3.5x1 + 6x2 200x1 + 90x2 x1 16000 (square footage required) x & x2 0 50 (rental limit expected) where x is the number of large spaces developed, and x2 is the number of small spaces developed. Solve this linear optimization problem using the Graphical Method (i.e., not using Excel - you need to show the steps). Specifically, you should do the following: a. Graph the constraint boundaries. [8 pts] b. Identify the feasible region for this problem on the graph. [2 pts] c. Identify the optimal corner point. (Hint: There is more than one way to accomplish this.) [2 pts] d. Determine the optimal solution for this problem, i.e., what are the optimal x and x2 values and the corresponding profit level? (Hint: Don't "eyeball" ituse algebra.) [8 pts] e. Briefly explain how you would determine the shadow price of the advertising budget constraint. (Alternatively, calculate the shadow price and show the steps taken.) [4 pts] f. If the rental limit constraint is decreased from 50 to 40, by how much will the monthly earnings change? [4 pts] g. To use linear programming, several assumptions/requirements must be met. Identify at least one LP assumption/requirement which is violated in this context, i.e., which may not be appropriate when the decision variables relate to the number of storage units developed. [2 pts]
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To solve this linear programming problem using the graphical method we must graph the constraints find the feasible region identify the corner points and then find the optimal solution Lets go through ...See step-by-step solutions with expert insights and AI powered tools for academic success
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