Essentials of Business Analytics 1st Edition by Jeffrey Camm,James Cochran,Michael Fry,Jeffrey Ohlmann ,David Anderson

Exercise 3

Galaxy Cloud Services operates several data centers across the United States containing servers that store and process the data on the Internet. Suppose that Galaxy Cloud Services currently has five outdated data centers: one each in Michigan, Ohio, and California and two in New York. Management is considering increasing the capacity of these data centers to keep up with increasing demand. Each data center contains servers that are dedicated to Secure data and to Super Secure data. The cost to update each data center and the resulting increase in server capacity for each type of server are as follows:

The projected needs are for a total increase in capacity of 90 Secure servers and 90 Super Secure servers. Management wants to determine which data centers to update to meet projected needs and, at the same time, minimize the total cost of the added capacity.
a. Formulate a binary integer programming model that could be used to determine the optimal solution to the capacity increase question facing management.
b. Solve the model formulated in part a to provide a recommendation for management.