Solution-Tutorial-5

Solution-Tutorial-5 - AB103 Statistical and Quantitative...

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1 AB103 – Statistical and Quantitative Methods Solutions - Tutorial 5 Chapter 2 (ASWM) 2.1 (page 70) 2.21 (page 73) a. Let F = number of tons of fuel additive S = number of tons of solvent base Ma x 40 F + 30 S s.t. 2/5 F + 1 / 2 S 200 Material 1 1 / 5 S 5 Material 2 3 / 5 F + 3 / 10 S 21 Material 3 F , S 0
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2 b. . 01 0 2 03 04 05 0 10 20 30 40 50 60 70 Feasible Region Tons of Fuel Additive Material 2 Optimal Solution (25,20) M a t e r i l 3 1 Tons of Solvent Base c. Material 2: 4 tons are used, 1 ton is unused. d. No redundant constraints. 2.25 (pages 74-75) S F
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3 Internet fund $20,000 Blue Chip fund $30,000 Annual return $ 5,100 b. The third constraint for the aggressive investor becomes 6 I + 4 B 320 This constraint is redundant ; the available funds and the maximum Internet fund investment constraints define the feasible region. The optimal solution is: Internet fund $35,000 Blue Chip fund $15,000 Annual return $ 5,550 The aggressive investor places as much funds as possible in the high return but high risk Internet fund.
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4 c. The third constraint for the conservative investor becomes 6 I + 4 B 160 This constraint becomes a binding constraint. The optimal solution is Internet fund $0 Blue Chip fund $40,000 Annual return $ 3,600 The slack for constraint 1 is $10,000. This indicates that investing all $50,000 in the Blue Chip fund is still too risky for the conservative investor. $40,000 can be invested in the Blue Chip fund. The remaining $10,000 could be invested in low-risk bonds or
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This note was uploaded on 03/21/2010 for the course BIZ ab103 taught by Professor Woo during the Spring '10 term at Nanzan.

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Solution-Tutorial-5 - AB103 Statistical and Quantitative...

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