Lauren Moore has sold her business for 500000 and wants to i

Lauren Moore has sold her business for $500,000 and wants to invest in condominium units (which she intends to rent) and land (which she will lease to a farmer). She estimates that she will receive an annual return of $8,000 for each condominium and $6,000 for each acre of land. A condominium unit costs $70,000 and land costs $30,000 per acre. A condominium will cost her $1,000 per unit, an acre of land will cost $2,000 for maintenance and upkeep, and $14,000 has been budgeted for these annual expenses. Lauren wants to know how much to invest in condominiums and land to maximize her annual return.

Formulate a mixed integer programming model for this problem

Solution

Condos Land RHS Maximise 8000 6000 Total Investment 70000 30000 <= 500000 Maintenance 1000 2000 <= 14000