Fairville is a city with 20,000 inhabitants. The city council is in the process of developing an equitable urban tax table. The annual tax base for cadastral property is $550 million. The annual tax base for food and drugs is $35 million. For general sales it is $55 million. Energy consumption is estimated at 7.5 million gallons. The council wants to set the tax rate based on 4 main goals.
1. Tax revenue must be at least greater than $16 million to meet the financial commitments of the locality.
2. Taxes on food and medicine cannot be greater than 10% of all taxes collected.
3. Sales taxes in general cannot be greater than 20% of the taxes collected.
4. Gas tax cannot be more than 2 cents per gallon.
a) Assume that all goals have the same weight. Does the solution satisfy all goals?
b) Suppose that tax collection has a 40% weighting with respect to the other goals, would the main goal be achieved, is the solution of all goals satisfied?
c) Use the following goal priority order G1>G2>G3>G4>G5.
