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The city of Jeddah is faced with a severe budget shortage. Seeking a long-term solution, the city council votes to improve the tax base by condemning an inner-city housing area and replacing it with a modern development. The project involves two phases: A- Demolishing substandard houses to provide land for the new development; and B- Building the new development. The following is a summary of the situation. 1- As many as 400 substandard houses can be demolished. Each house occupies a 0.5-acre lot. The cost of demolishing a condemned house is $3000. 2- Lot sizes for new single-, double-, triple-, and quadruple-family homes (units) are 0.18, 0.28, 0.4, and 0.5 acre, respectively. Streets, open space, and utility easements account for 15% of available acreage. 3- In the new development the triple and quadruple units account for at least 25% of the total. Single unit must be at least 20% of all units and double units at least 10%. 4- The tax levied per unit for single-, double-, triple-, and quadruple units is $1,000, $2000, $3000, and $4000, respectively. 5- The construction cost per unit of single-, double-, triple-, and quadruple- family homes is $60,000, $80,000, $150,000, and $170,000, respectively. Financing through a local bank can amount to a maximum of $18 million. Formulate the Problem as a LP Problem?

Operation Management, Management Studies

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