Fairville is a small city with a population of about 20,000 residents. The city council is in
Question:
Fairville is a small city with a population of about 20,000 residents. The city council is in the process of developing an equitable city tax rate table. The annual taxation base for real estate property is $550 million. The annual taxation bases for food and drugs and for general sales are $35 million and $55 million, respectively. Annual local gasoline consumption is estimated at 7.5 million gallons. The city council wants to develop the tax rates based on four main goals.
Goal 1: Tax revenues must be at least $16 million to meet the city’s financial commitments.
Goal 2: Food and drugs taxes cannot exceed 10% of all taxes collected.
Goal 3: General sales taxes cannot exceed 20% of all taxes collected.
Goal 4: Gasoline tax cannot exceed 2 cents per gallon.
a. Formulate the Fairville tax problem as a goal programming problem, assuming that the town council is specifying an additional goal, G5, that requires gasoline tax to equal at least 10% of the total tax bill.
Finite Mathematics and Its Applications
ISBN: 978-0134768632
12th edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair