Lauren Moore has sold her business for $500,000 and wish to spend in condominium units (which she intends to rent) and land (which she will lease to farmer). She estimates that she will get 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 for each acre. A condominium will cost her $1,000 for each 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 spend in condominiums and land to maximize her annual return.
a. Formulate mixed integer programming model for this problem.
b. Solve this model using the computer.