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    Formulating a decision model

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    The New York City Development Corporation has just purchased a small hotel for conversion to condominium apartments. The building, in a popular area of New York, will be highly marketable, and each condominium sale is expected to yield a good profit. The conversion process, however, includes several options. Basically, four types of condominiums can be designed out of the former hotel rooms. They are: deluxe one-bedroom apartments, regular one-bedroom apartments, deluxe studios, and efficiency apartments. Each will yield a different profit, but each type also requires a different level of investment in carpeting, painting, appliances, and carpentry work. Bank loans dictate a limited budget that may be allocated to each of these needs. Profit and cost data, and cost of conversion requirements for each apartment are shown in the accompanying table.

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    Formulate a decision model to solve this problem.

    The New York City Development Corporation has just purchased a small hotel for conversion to condominium apartments. The building, in a popular area of New York, will be highly marketable, and each condominium sale is expected to yield a good profit. The conversion process, however, includes several options. Basically, four types of condominiums can be designed out of the former hotel rooms. They are: deluxe one-bedroom apartments, regular one-bedroom apartments, deluxe studios, and ...

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    This provides an example of formulating a decision model to solve a given problem.

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