Problem: The Texas Electronic Company (TEC) is contemplating a research and development program encompassing eight major projects. The company is constrained from embarking on all projects by the number of available scientists (40) and the budget available for projects ($3000,000). Following are the resources requirements and the estimated project for each project.
Project Expense Scientists Profit
Project $0 Required $0
1 60 7 36
2 110 9 82
3 53 8 29
4 47 4 16
5 92 7 56
6 85 6 61
7 73 8 48
8 65 5 41
1) What is the maximum profit, and which project should be selected?
2) Suppose that management decides that projects 2 and 5 are mutually exclusive. This is, TEC should not undertake both. As a result, what are the revised project portfolio and the revised maximum profit?
3) Suppose that management also decides to undertake at least two of the projects involving consumer products. (These happen to be projects 5-8) As a result, what are the revised project portfolio and the revised maximum profit?