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Question: The government is auctioning off oil leases at two sites. At each site, 150,000 acres of land are to be auctioned. Cliff Ewing, Blake Barnes, and Alexis Pickens are bidding for the oil. Government rules state that no bidder can receive more than 45% of the land being auctioned. Cliff has bid $2000 per acre for site 1 land and $1000 per acre for site 2 land. Blake has bid $1800 per acre for site 1 land and $1500 per acre for site 2 land.
Alexis has bid $1900 per acre for site 1 land and $1300 per acre for site 2 land.

a. Determine how to maximize the governments revenue with a transportation model.

b. Use SolverTable to see how changes in the governments rule on 45% of all land being auctioned affect the optimal revenue. Why can the optimal revenue not decrease if this percentage required increases? Why can the optimal revenue not increase if this percentage required decreases?

1 O lease auction 3ds for sites (dollars/acre) 4 s twing 6 Bames 7 Pickens $ 10 11 11 13 twing Mas % that can be sold to any bidder Number of acres sold to bidders 14 Bames 15 Pickens 16 Total 37 19 20 Revenue (Smillions) 21 22 Maximum land perchased 21 P 24 31 32 33 45 36. 37 36 len 19 ert A > 41 43 41 44 A Ste 1 $2,000 $1,400 $1,900 Site 1 5000000 C DAS Ste 2 $1,000 $1,500 $1,300 Site 2 D $135,000 $135,000 $135,000 Total 0 O 810 Maralownd 150000 150000 Formula Bar ver Parameters Set Objective: To: O Max Min By Changing Variable Cells: 58513 SCS15 $B$20 Subject to the Constraints: S8516 SCS16 41 43 41 44 A Ste 1 $2,000 $1,400 $1,900 Site 1 5000000 C DAS Ste 2 $1,000 $1,500 $1,300 Site 2 D $135,000 $135,000 $135,000 Total 0 O 810 Maralownd 150000 150000 Formula Bar ver Parameters Set Objective: To: O Max Min By Changing Variable Cells: 58513 SCS15 $B$20 Subject to the Constraints: S8516 SCS16