Solutions-Assignment1

# Solutions-Assignment1 - c s 1 = 0 s 2 = 0 s 3 = 4/7 5 a Let...

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Solutions to Assignment 1 Chapter 1. 1. a. Profit = 100,000 x - (1,500,000 + 50,000 x ) = 0 50,000 x = 1,500,000 x = 30 b. Build the luxury boxes. Profit = 100,000 (50) - (1,500,000 + 50,000 (50)) = \$1,000,000 Chapter 2. 2.

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3. a. b. Yes, constraint 2. The solution remains x 1 = 2, x 2 = 2 if constraint 2 is removed. 4. a. Max 4 x 1 + 1 x 2 + 0 s 1 + 0 s 2 + 0 s 3 s.t. 10 x 1 + 2 x 2 + 1 s 1 = 30 3 x 1 + 2 x 2 + 1 s 2 = 12 2 x 1 + 2 x 2 + 1 s 3 = 10 x 1 , x 2 , s 1 , s 2 , s 3 0 b.
x 2 x 1 0 2 4 6 8 10 2 4 6 8 10 12 14 Optimal Solution x 1 = 18/7, x 2 = 15/7, Value = 87/7
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Unformatted text preview: c. s 1 = 0, s 2 = 0, s 3 = 4/7 5. a. Let B = percentage of funds invested in the bond fund S = percentage of funds invested in the stock fund Max 0.06 B + 0.10 S s.t. B 0.3 Bond fund minimum 0.06 B + 0.10 S 0.075 Minimum return B + S = 1 Percentage requirement b. Optimal solution: B = 0.3, S = 0.7 Value of optimal solution is 0.088 or 8.8%...
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## This note was uploaded on 11/18/2011 for the course BUS 220 taught by Professor Drexel during the Fall '08 term at SUNY Stony Brook.

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Solutions-Assignment1 - c s 1 = 0 s 2 = 0 s 3 = 4/7 5 a Let...

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