The models in this chapter are often called combinatorial models because each solution i...
The models in this chapter are often called combinatorial models because each solution is a combination of the various 0–1 values, and only a finite number of such combinations exist. For the capital budgeting model in Figure 6.4, there are seven investments, so there are 27 = 128 possible solutions (some of which are infeasible). This is a fairly large number, but not too large. Solve the model without Solver by listing all 128 solutions. For each, calculate the total cash requirement and total NPV for the model. Then manually choose the one that stays within the budget and has the largest NPV.
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