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Energy Management Corporation (EMC) must decide its level ofcapital investment in the six energy ventures described below. EMCwishes to maximize its total expected return on a maximum totalinvestment of $10,000,000. At least half of this must be in theUnited States, including Alaska. No more than 20% can be in sourcrude and coal investments. In addition, allocations must at leastmeet the minimums specified in column three below. For example,investment in Wyoming Coal must be at least $1,000,000.

Venture (Location)	Expected Return	Minimum Investment	Primary Product
Wyoming Coal	75%	$1,000,000	Coal
Colorado Shale	62%	$400,000	Sour crude
Prudhoe Bay Alaska	125%	$1,000,000	Sweet crude
Mexico	135%	None	Sweet crude
Alberta Tar Sands	80%	None	Sour crude
Virginia Coal	85%	$300,000	Coal

1. Formulate the linear programming model. Clearly state yourdecision variables, objective function and all constraints. Usefractions rather than percentages in your formulation of theobjective function.

2. Solve the model using Microsoft Excel Solver. Attach theMicrosoft Excel file as part of your submission.

3. Interpret the results from Microsoft Excel Solver, includingthe Sensitivity Report. What aspects of the computer-generatedstrategy are you in agreement with (based on a consideration of thesensitivity data)? What aspects of it would you disagree with?Why?