Question

Please help me with this exercise.

4. At a small but growing airport, the local airline company is purchasing a new tractor for a tractor-trailer train to bring luggage to and from the airplanes. A new mechanized luggage system will be installed in three years, so the tractor will not be needed after that. However, because it will receive heavy use, so that the running and maintenance costs will increase rapidly as it ages, it may still be more economical to replace the tractor after one or two years. The next table gives the total net discounted cost associated with purchasing a tractor (purchase price minus trade-in allowance, plus running and maintenance costs) at the end of year i and trading it in at the end of year j (where year 0 is now). $8,000 2 $18,000 10,000 $31,000 21,000 12,000 Management wishes to determine at what times (if any) the tractor should be replaced to minimize the total cost for the tractor(s) over three years. (a). Formulate a network model for this problem as a shortest path problem. (b). Formulate and solve a spreadsheet model for this problem. Activate Windows Go to Settings to activate Window

Answer 1

Answer 31,000 18,000 21,000 8.000 10.000 13,000 D E F G C Route cost Nodes Net flow Supply Demand $ 8,000 year o $ 18,000 year lo = LAB From To 2 year of years 1 3 year o your 2 year o year 3 5 yeur 1 year a 6 Year 1 year 3 7 lyero a year 3 o o 4. $ 31,000 Year alo- Yearr 3 - 1 -1 o 1 0 $ 10,000 $ 21,000 $ 12,000 Totalt & 29,000