Table 10-3 A company has decided to use 01 integer programming to help make some investment decisions. There are three possible investment alternatives from which to choose, but if it is decided that a particular alternative is to be selected, the entire cost of that alternative will be incurred (i.e., it is impossible to build one-half of a factory). The integer programming model is as follows:

Maximize

5000 X1 + 7000X2 + 9000X3

Subject to:

X1 + X2 + X3 2

Constraint 1

-X1 + X2 0

Constraint 2

25,000 X1 + 32,000 X2 + 29,000 X3 62,000

(budget limit)

16 X1 + 14 X2 + 19 X3 36

(resource limitation)

all variables = 0 or 1

where

X1 = 1 if alternative 1 is selected, 0 otherwise

X2 = 1 if alternative 2 is selected, 0 otherwise X3 = 1 if alternative 3 is selected, 0 otherwise Solution x1 = 1, x2 = 0, x3 = 1, objective value = 14,000. Table 10-3 presents an integer programming problem. What is the meaning of Constraint 2?

		If alternative 2 is selected, alternative 1 must also be selected.
		Both alternatives 1 and 2 must be selected.
		No more than one alternative may be selected.
		Either alternative 1 or alternative 2 must be selected.