ucinl huk we lestaurant sels at least twi as much pistachio as lime. Profit per
ID: 357487 • Letter: U
Question
ucinl huk we lestaurant sels at least twi as much pistachio as lime. Profit per gallon of lime gelato is $4.15, and profit per gallon of pistachio gelato is $3.60. Formulate an LP model that can be used to determine how much of each flavor of gelate Gregory's should order each week. 6. Graham Gepsum Investments Co. has $10,000 to invest for a new client and want to maximize the interest earned over the next year. Data for the four investment possibilities are given in the table below To mitigate some of the risk, the Board of GGI has specified that at least 35 percent of the total investment must be placed in corporate bonds and stock. Additionally, no more than 1S percent of the total investment can be in gold certificates. Each individual investment is also limited to a specific dollar amount as shown in the table. Corporate Common stock bonds Gold certificates Real estate Expected return 9% $3,000 8.5% Maximum allowable $3,000 investment 10% $2,000 13% $1,000 Write the LP model to help ES determine the best mix of investments for their client.Explanation / Answer
Objective function :
Gross return from each instrument = Expected return(%)/100 x Amount invested on instrument
Since objective is to maximize total return ,
Objective function = Z = Maximize ( 0.085.B + 0.09.S + 0.10.G + 0.13.R)
Constraints :
Constraint 1 :
Given the maximum allowable investment limits ,
B < = 3000
S < = 3000
G < = 2000
R < = 1000
Constraint 2 :
Since maximum investible amount is $10,000.
B + S + G + R < = 10,000
Constraint 3 :
Since at least 35% of total investments ( i.e. 35% of $10,000 = $3500 ) must be made in bonds and stocks ,
B + S > = 3500
Constraint 4 :
Since no more than 15 percent of total investment ( 15% of $10,000 = $1500 ) can be made in gold certificate,
G < = 1500
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