Explain the value of increasing the budget for the project

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Reference no: EM131268568

Rosenberg Land Development (RLD) is a developer of condominium properties in the Southwest United States. RLD has recently acquired a 40.625-acre site outside Phoenix, AZ. Zoning restrictions allow at most 8 units per acre. Three types of condominiums are planned: one-, two-, three-bedroom units. The average construction costs for each type of unit are $450,000, $600,000, ad $750,000. These units will generate a net profit of 10%. The company has equity and loans totally $180 million dollars on this project. From prior development projects, senior managers have determined that there must be a minimum of 15% one-bedroom units, 25% two-bedroom units, and 25% three-bedroom units.

a) Develop a linear optimization model to determine how many of each type of unit the developer should build.

b) Implement your model on a spreadsheet and find an optimal solution

c) Explain the value of increasing the budget for the project.

Reference no: EM131268568

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