Industrial Engineering Mathematics
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Blank and Tarquin
Problems 8-13, 8-28, 9-6, 9-12, and 9-26
Trans-West Railway has budgeted $1.8 million to be invested in safety improvements. They are considering 13 different possible projects. The benefits have already been converted into dollar terms, and expressed in present value. The costs and benefits of each project are listed below, in order of decreasing benefit/cost ratio:
Project
Benefit
Net Ben.
Benefit/Cost Ratio
$96K
$280K
$184K
$31K
$85K
$54K
2.74
$100K
$255K
$155K
$212K
$410K
$198K
$282K
$510K
$228K
$373K
$620K
$247K
$262K
$390K
$128K
$464K
$690K
$226K
$423K
$580K
$157K
$549K
$720K
$171K
$615K
$730K
$115K
$705K
$800K
$95K
$876K
$860K
-$16K
1. Which safety improvement(s) should Trans-West invest in? (You can assume that it is acceptable to invest in multiple different projects, since none are mutually exclusive.)