Refer to the "Freeman-Brown Private School Case Study" document for details pertaining to this assignment. The board of directors at Freeman-Brown Private School (FBPS) has hired you as part of a consulting team to review the situation and present your findings and recommendations. Write a paper (1,250-1,500 words) that discusses the case. Complete this assignment from the perspective of the hired consultants. Respond to the following questions: 1. Review how organizations interact with their external environment (as open systems and complex adaptive systems). How effective was Freeman-Brown as an open system at the time of the closure? How effective was Freeman-Brown as a complex adaptive system at the time of the closure?  2. Review your reading this week on the internal environment of organizations. What is your evaluation of the organizational culture and organizational climate at the time the decision to close two campuses was made? 3. What is your evaluation of the decision made by Dr. Murphy and Caudill? What is your evaluation of the process of going about the closure? 4. Was FBPS demonstrating social responsibility? Discuss the closure impact on three specific stakeholders.   5. Provide an explanation, using appropriate management theories, for how the administration could have handled the closure effectively with stakeholders? Include one theory from each of the following: the classical approach, the human relations approach, and the modern management approach. 6. You have been asked to suggest two goals: one long-term and one short-term goal for the future direction of FBPS. Justify your decision. 7. Present a concluding statement that integrates the 4 functions of management as a means to revamp management at FBPS and meets the recommended goals. Freeman-Brown Private School Case Study The following case study is based on true events. Names and identifying details have been modified. Freeman-Brown Private School (FBPS), based in Illinois, was founded in 1944 by the Brown and Freeman families. Over the years, the school acquired a reputation as a leading academic institution with an advanced curriculum. Parents described the school as having a highly performing academic environment that provided a rigorous curriculum while fostering a safe, family-oriented atmosphere in a place where community was valued. Not surprisingly, the student population grew and the school opened multiple campuses in the metropolitan area (Bristol, Culpeper, Richmond, Hampton, and Staunton). The Brown and Freeman families eventually sold FBPS to the for-profit, Alabama-based Caudhill International Family of Schools in 2007. The mission of the Caudhill group was to broaden the international focus of FBPS, along with the nine other schools it owned (across the United States, Switzerland, and Mexico). Even under the new ownership, the environment in the various FBPS campuses was still described as achievement-oriented and supportive. Milestones 1. 1944 - Fr ...

1. Refer to the "Freeman-Brown Private School Case Study"
document for details pertaining to this assignment.
The board of directors at Freeman-Brown Private School
(FBPS) has hired you as part of a consulting team to review the
situation and present your findings and recommendations. Write
a paper (1,250-1,500 words) that discusses the case. Complete
this assignment from the perspective of the hired consultants.
Respond to the following questions:
1. Review how organizations interact with their external
environment (as open systems and complex adaptive systems).
How effective was Freeman-Brown as an open system at the
time of the closure? How effective was Freeman-Brown as a
complex adaptive system at the time of the closure?
2. Review your reading this week on the internal environment of
organizations. What is your evaluation of the organizational
culture and organizational climate at the time the decision to
close two campuses was made?
3. What is your evaluation of the decision made by Dr. Murphy
and Caudill? What is your evaluation of the process of going
about the closure?
4. Was FBPS demonstrating social responsibility? Discuss the
closure impact on three specific stakeholders.
5. Provide an explanation, using appropriate management
theories, for how the administration could have handled the
closure effectively with stakeholders? Include one theory from
each of the following: the classical approach, the human
relations approach, and the modern management approach.
6. You have been asked to suggest two goals: one long-term and
one short-term goal for the future direction of FBPS. Justify
your decision.
7. Present a concluding statement that integrates the 4 functions
of management as a means to revamp management at FBPS and
meets the recommended goals.

2. Freeman-Brown Private School Case Study
The following case study is based on true events. Names and
identifying details have been modified.
Freeman-Brown Private School (FBPS), based in Illinois, was
founded in 1944 by the Brown and Freeman families. Over the
years, the school acquired a reputation as a leading academic
institution with an advanced curriculum. Parents described the
school as having a highly performing academic environment
that provided a rigorous curriculum while fostering a safe,
family-oriented atmosphere in a place where community was
valued. Not surprisingly, the student population grew and the
school opened multiple campuses in the metropolitan area
(Bristol, Culpeper, Richmond, Hampton, and Staunton). The
Brown and Freeman families eventually sold FBPS to the for-
profit, Alabama-based Caudhill International Family of Schools
in 2007. The mission of the Caudhill group was to broaden the
international focus of FBPS, along with the nine other schools it
owned (across the United States, Switzerland, and Mexico).
Even under the new ownership, the environment in the various
FBPS campuses was still described as achievement-oriented and
supportive. Milestones
1. 1944 - Freeman-Brown Private School was founded by the
Brown and Freeman families.
1. 1944 - Inaugural opening established Hampton campus.
1. 1969 - Culpeper campus was established.
1. 1981 - Richmond campus was established.
1. 2003 - Bristol campus was created.
1. 2007 - Freeman-Brown Private Schools joined the Caudhill
International Family of Schools.
1. 2008 - Culpeper campus relocated to Staunton campus.
1. 2008 - The inaugural freshman class joined Freeman-Brown
Preparatory High School.
1. 2010 - Freeman-Brown Preparatory High School was
designated an authorized International Baccalaureate (IB)
Programme School.
1. 2012 - Freeman-Brown Preparatory (High) School graduated

3. its first class in May.
1. 2012 - Freeman-Brown's new 6th-12th grade Middle and
Upper School campus opened in August in North Richmond.
1. 2013 - The Upper School Athletic Complex and Student
Center opened.
Within a year of Caudhill owning the school, parents noticed a
subtle name change. The school, which was previously known
as "Freeman-Brown Private School," was now "Freeman-Brown
Preparatory School." This name change in itself did not seem to
affect the school's image or functioning at an operational level,
but it was an early indication of the strategic direction in which
the school would be heading.
In 2008, FBPS attempted to enter the high school business at its
Culpeper campus, but that initial attempt was not as successful
as anticipated. This was probably a contributory factor to the
relocation of the high school to a new state-of-the-art campus in
Richmond, known as the North Richmond campus.
A high point for FBPS came in 2010 when it launched its
International Baccalaureate Programme (IB Programme). Its
first IB graduating class was May of 2012. However, that same
year FBPS decided to close both the Culpeper and the Hampton
campuses. At the time of the Hampton closure, families were
informed that low enrollment was the reason behind the closure
and that all other campuses would remain open. The economic
recession in the United States between 2005 and 2011 led to
many organizations going out of business, and the education
sector was not exempt (U.S. Department of Labor, 2013).
In addition to the economic recession, private schools in Illinois
have faced intense competition from charter schools, which are
independently run public schools. Between 2011 and 2013, two
top-rated charter schools opened campuses within 5 miles of the
Staunton campus. Some FBPS Staunton campus students
transferred to those schools.
In 2013, FBPS sent an e-mail to parents in error, informing
them that the Staunton campus (pre-K through middle school)
would be discontinued. That e-mail was withdrawn on the same

4. day, and shortly afterwards, the head of the school retired.
Caudhill appointed Dr. Audrina Murphy as the new head of the
school. Dr. Murphy, a well-educated and experienced
administrator, worked with "strategic planning experts" to
create a niche and a new mission for the school. Dr. Murphy
embraced her new role and continuously assured parents that the
Staunton campus would remain open. Parents who attended the
Parent Teacher Student Association (PTSA) meeting in mid-
December 2013 affirmed that she offered assurances at the
meeting.
January 2014
Winter break started on Monday, December 23, 2013, and
students were scheduled to return to school on Tuesday, January
7, 2014. On Monday, January 6, 2014, the Staunton campus
principal received information that the campus would close at
the end of the semester, and this news was conveyed to faculty
and staff at the school. Only two campuses would remain open:
the Richmond and North Richmond campuses.
Parents were outraged, students were in disarray, and faculty
and administration were in shock. If parents had been informed
earlier, it would have been possible for them to try to secure a
spot for their children at one of the schools nearby. However,
open admissions at the surrounding schools had closed earlier in
December. Parents attempted to place their children on waiting
lists, but most lists had already filled up, some in excess of 800
students. Additionally, many local schools had already
completed their hiring for the following academic year, leaving
FBPS faculty and staff limited in employment options.
As it turned out, FBPS was not the only school closing
campuses. That period was a difficult time for schools in
Illinois in general, with reports from the Center for Education
Reform (2011) reporting that between 2010 and 2011 the major
reasons schools closure were financial, mismanagement, and
district-related issues.
Parent Meeting
Parents were invited to a meeting on January 8, 2014, to meet

5. with the head of the school and a Caudhill official. Parents
invited the media to the meeting, but the media was denied
access. At the onset of the meeting, Dr. Murphy took the
podium and began by praising the Staunton campus and its
community. These statements bothered some of the parents, who
demanded to know why the school was closing if it had all the
positive attributes just attributed to it.
The meeting grew tense and heated. Parents felt betrayed
because of the timing of the closure announcement. Dr. Murphy
stated that buses would be provided to shuttle children ages 2-
12 to the new locations. However, the closest campus would
require a trip of 40-miles (minimum) twice every day. This
would not be a viable option for many parents, but the
announcement timing left them with few options.
Other parents tried to negotiate with the administration to run
the school for one more academic year so families would have
enough time to transition their children. Neither the Caudill
official nor Dr. Murphy agreed to this proposed solution.
Some parents offered to pay more in terms of tuition, but
administration again did not agree to this proposal. Parents
asked if the closure was due to financial reasons. Dr. Murphy
replied that finances were "not a factor" and the closure was for
"demographic reasons."
While Dr. Murphy stated that the reason for the closure of the
two campuses was not financial in nature, Moody's analytics
reported that the parent company (Caudill) was experiencing
some strain. The rating of Moody's analytics is a representation
of the analysts' opinion of the creditworthiness of an
organization. From August 2012 to 2014, the corporate family
rating (CFR) went from B2 to Caa2 indicating a lack of
confidence in the financial health of Caudill.
Moving Forward
Following the parent meeting in January, some families pulled
their children out of FBPS immediately, prior to the completion
of the academic year. Those families received no financial
reimbursement as parents had signed a contract for the academic

6. year. Other families decided to withdraw from the school at the
end of the semester. By June 2014, student population had
significantly diminished on the affected campuses.
Some of the students who remained at Staunton planned to
transfer to surrounding schools. Few decided to continue at the
Richmond and North Richmond campuses. Others registered at
Allegiant Academy, a new nonprofit private school opened by
parents previously affiliated with Staunton. Kasey Luce,
daughter of one of the FBPS founders, came out of retirement to
become principal of Allegiant Academy. In addition to her role
as principal of the school, Luce was also the president of the
nonprofit corporation that owned the school.
Allegiant Academy began with an enrollment of about 100
students (pre-K-8 grade), rising to 120 students by the end of
the year. Most of these students were from the Staunton campus
population. The school leased a church for its first year to house
the school. Parents described Allegiant Academy in positive
terms with approximately 90% of families choosing to reenroll
for the 2015-2016 academic year.
References
Center for Education Reform. (2011). Appendix D. Closed
charter schools by state. Retrieved from
https://www.edreform.com/wp-
content/uploads/2011/12/CER_FINALClosedSchools2011-1.pdf
U.S. Department of Labor. (2013). Travel expenditures during
the recent recession, 2005–2011. Retrieved from
http://www.bls.gov/opub/ted/2013/ted_20130115.htm
Linear Programming
A linear programming problem is an optimization problem in
which the objective function and the constraint functions are
linear functions of the decision variables x ∈ Rn. The standard
form of a linear programming problem is the following:
min cTx

7. subject to Ax = b, x ≥ 0,
with a cost vector c ∈ Rn, a constraint matrix A of dimension m
× n, and a right hand side vector b ∈ Rm. Every linear
programming problem can be transformed to an equivalent
standard form. The role of the standard form is both theoretical
and algorithmic. In applications, linear programming modeling
languages and solvers accept a variety of formulations. The
theory of linear programming is necessary for the understanding
of the models, application of off-the-shelf software, and correct
interpretation of the results. It is also an important step towards
more general optimization models: nonlinear, dynamic, and
stochastic.
Problem 1. (Portfolio Allocation) Considering following four:
an aggressive growth fund (Fund 1), an index fund (Fund 2), a
corporate bond fund (Fund 3), and a money market fund (Fund
4), each with different expected annual return and risk level.
Fund Type
Growth
Index
Bond
Money Market
Fund Number
1
2
3
4
Expected Return
20.69%
5.87%
10.52%
2.43%
Risk Level
4
2
2
1

8. Maximum Investment
40%
40%
40%
40%
In order to contain the risk of the investment to an acceptable
level, the amount of money allocated to the aggressive growth
plus the corporate bond funds cannot exceed 60% of the
portfolio, and the average risk level of the portfolio cannot
exceed 2. The total amount invested should be $10 million.
What is the optimal portfolio allocation for achieving the
maximum expected return at the end of the year, if no short
selling is allowed?
Benefits (PV)
Benefit/Cost Ratio
$950.00
2.38
$780.00
2.23
$440.00
2.20
$215.00
2.15
$630.00
2.10
$490.00
1.96
$560.00
1.87
$600.00
1.71
Problem 2. (Capital Budgeting) The operating manager at a
pharmaceutical company is considering funding proposals for
eight different research and development (R&D) projects, but
she has limited funds C(C = $1,000.00). The cost of investing in
Project i is ci, and bi is the estimated present value of benefit of

9. Project i, as shown in the following table.
Each project is on a “take it or leave it” basis, that is, it is not
possible to fund a project partially. Which projects should the
operating manager fund in order to maximize the present value
of the expected total benefit?
Problem 3. (Cash Flow Matching) Consider an asset manager
who is managing funds for the corporate sponsor of a defined
benefit pension plan that needs to ensure a particular stream of
semiannual cash payments over the next four years for retiring
plan participants. For example, the pension plan may have
semiannual obligations representing annuity payments. Let the
cash obligations for the eight payments dates of the next four
years be represented by a vector m = (m1,...,m8). The asset
manager is considering investing in five different high
investment-grade quality bonds. Over the next eight payment
dates (i.e., semiannually), bond i pays out coupons ci =
(ci1,...,ci8). If the bond matures at date t, the corresponding cit
equals the coupon plus the principal. The bonds currently trade
at ask prices p = (p1,...,p5). The relevant data are presented in
the following table.
Current Bond Price (pi)
$102.36
$110.83
$96.94
$114.65
$96.63
Cash Flows (cit)
Obligations (mt)
t = 1

10. $2.50
$5.00
$3.00
$4.00
$3.50
$100,000.00
t = 2
$2.50
$5.00
$3.00
$4.00
$3.50
$200,000.00
t = 3
$2.50
$5.00
$3.00
$4.00
$3.50
$100,000.00
t = 4
$2.50
$5.00
$3.00
$4.00
$3.50
$200,000.00
t = 5
$102.50
$5.00
$3.00
$4.00
$3.50
$800,000.00
t = 6

11. $105.00
$3.00
$4.00
$3.50
$1,200,000.00
t = 7
$103.00
$4.00
$3.50
$400,000.00
t = 8
$104.00
$103.50
$1,000,000.00
The asset manager would like to ensure that the coupon
payments from the bonds over the pension plan’s obligations.
The objective is to minimize the cost of acquiring the bonds
today while still meeting all expected future obligations.
Problem 4. An oil refinery can buy two types of oil: light crude
oil and heavy crude oil. The cost per barrel of these types is
respectively $20 and $15. The following quantities of gasoline,
kerosene and jet fuel are produced per barrel of each type of oil.
GASOLINE
KEROSINE
JET FUEL
Light crude oil
0.4
0.2
0.35
Heavy crude oil

12. 0.32
0.4
0.2
Note that 5 percent and 8 percent, respectively, of the crude are
lost during the refining process. The refinery has constructed to
deliver 1 million barrels of gasoline, 500,000 barrels of
kerosine, and 300,000 barrels of jet fuel. Formulate the problem
of finding the number of barrels of each crude oil that satisfies
the demand and minimizes the total cost as a linear program.
Problem 5. A company makes three products: kettlebell, barbell
and dumbbell. Each kettlebell requires 1/4 hours of production
labor, 1/8 hours of testing, and $1.2 worth of raw materials.
Each barbell requires 1 hours of production labor, 1/2 hours of
testing, and $1.5 worth of raw materials. Each dumbbell
requires 1/3 hours of production labor, 1/3 hours of testing, and
$0.9 worth of raw materials. Given the current personnel of the
company, there can be at most 90 hours of labor and 80 hours of
testing, each day. Products of the first, second and third types
have a market value of $9, $10 and $8, respectively. Formulate
the problem of maximization of profit as a linear program.
Problem 6. (Currency Conversion) Current cash reserves and
their desired position in six different currencies (in millions)
are as follows.
Initial Position
Desired Position
U.S.$
5
8
Uen
70
100
¤uro
3
5
Can.$

13. 15
4
G.B.£
2
3
Aust.$
7
5
Swiss Franc
8
12
We want to convert the initial position amounts so that we have
reserves at least equal to the amounts in the desired position.
The conversion rates are presented in the second table.
U.S.$
Uen
¤uro
Can.$
G.B.£
Aust.$
Swiss Franc
U.S.$
1
76.925
0.7091
0.9902
0.6211
0.9489
0.7827
Uen
0.013
1
0.0092
0.0129
0.0081

14. 0.0133
0.0102
¤uro
1.4102
108.4797
1
1.3963
0.8759
1.3381
1.1038
Can.$
1.0099
77.6903
0.7162
1
0.6273
0.9583
0.7905
G.B.£
1.61
123.8485
1.1417
1.5941
1
1.5277
1.2602
Aust.$
1.0538
81.0784
0.7473
1.0435
0.6546
1
0.8249
Swiss Franc
1.2776

15. 98.2759
0.9059
1.265
0.7935
1.2123
1
The numbers in this table should be understood this way: buying
1 U.S. dollar for Japanese Yen requires 76.925 U, 1 U.S. dollar
costs 0.7091¤, etc. In order to buy 1 Japanese Yen for U.S.
dollars we need to pay $0.013, etc.
Find the optimal conversion plan to satisfiy the goals and to
maximize the value of U.S $ of the new position.
Problem 7. Solve the following LP problems geometrically
(graphically).
(a)
minimize − 2x1− 3x2 subject to
x1 + 2x2 ≤ 2 x1,x2 ≥ 0
(b)
maximize x1 + 2x2 subject to
−x1 + x2 ≤ 1 x1 ≤ 2 x2 ≤ 2
x1,x2 ≥ 0