Land Development Problem
Lab 303
Development Problem
• A ten-acre slum in Riyadh City has to be
cleared
• Two housing plans are to be considered:
– low-income housing (Addakil AL-Mahdood)
– middle-income housing
• 20 and 15 units per acre respectively
Development Problem
• unit costs of low and middle-income housing
are SAR 13,000 and SAR 18,000
• The lower and upper limits set by the officials
on the number of low income housing units
are 60 and 100
• middle income housing units must lie
between 30 and 70
Development Problem
• combined maximum market potential is
estimated to be 150
• total mortgage committed to the renewal plan
is not to exceed SAR 2 million
• it was suggested that the number of lowincome units be at least 50 units greater than
one-half the number of middle-income
housing units
Development Problem
• Formulation
Development Problem
Development Problem
• Reformulate if the objective is to maximize
number of houses constructed