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115finalF06

115finalF06 - ENGRI 115 Fall 2006 ENGRI 115 FINAL 1 Problem...

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ENGRI 115, Fall 2006 2 1. (15) Rupert Murdoch, the media mogul, has just told you of his plan to invest \$1.2 million in one or more of the four major entertainment companies (Artisan, Disney, Fox, Lions Gate). As his investment advisor, you are to determine which companies Mr. Murdoch should invest in and how many shares of those companies he needs to buy in order to maximize his estimated annual return. His financial research team has provided you with the information you need to make the decision. (Disclaimer: the problem and all the numbers provided are fictitious and overly simplified) Entertainment companies Stock Price per share Est. Annual return per share 1. ARTISAN \$14 \$0.98 2. DISNEY \$25 \$1.42 3. FOX \$24.5 \$2.11 4. LIONS GATE \$2.38 \$0.39 Shares can be purchased in fractional amounts, but you have to buy at least one whole share of a company if you are investing in it. Beside these data, Mr. Murdoch also gave you some additional guidelines that you need to follow: Total number of ARTISAN and DISNEY shares bought has to be greater than 5,000. You can invest in at most 3 different companies. You can invest in either DISNEY or FOX but not both. You can invest in LIONS GATE only if you invest in ARTISAN. Formulate (do not solve) a linear IP (or Mixed linear IP) to maximize Mr. Murdoch’s annual return on investment, clearly defining the variables.
ENGRI 115, Fall 2006 3 Additional space for problem 1

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ENGRI 115, Fall 2006 4 2. (35) (a) (10) Solve the following linear programming problem using the simplex method.
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