- What variable controls the value? (decision variable) - What limits your answe

Question

- What variable controls the value? (decision variable) - What limits your answer? TIAA-OR F manages money for a variety of companies. It has three primary investments that it uses: The bonds return 4%, the traditional stock funds return 9%, and the growth stocks return 14%. The company always invests at least 20% of its portfolio in bonds. It also wants t invest at least twice as much in traditional stocks as it does in growth stocks. If the company has $2,000,000 to invest, how should it break down the investment in order to maximize return?

Explanation / Answer

(c) Decision Variables- The variables in a linear program are a set of quantities that need to be determined in order to solve the problem; i.e., the problem is solved when the best values of the variables have been identified. The variables are sometimes called decision variables because the problem is to decide what value each variable should take.

Here,Decision Variables are x,y,z

(d) Describe the constraints.
What are the limits on "how much" your decision variables can be? Look for words like "at least", "no more than", "two thirds of of", "we must fill orders for", etc.

Any linear program is defined by the number of variables and the number of constraints. Do not count the non-negativity restrictions as constraints.

Example- 3x + 4y <= 14 (labor hours)
6x + 4y <= 15 (lbs material)

Here in this case, constraints are y-2z>=0 and x>=0.20

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