Term 1

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Test 2 take home part (no solution)
Direction: Show work or circle the letter of the most correct response. Points related to each question are marked before the question. This test like in class part is worth 100 points. This test has 1 free point.
Problem 1
A credit union wants to make investments in the following: The firm will have $2,500,000 available for investment during the coming year. The following restrictions apply:
• Risk-free securities may not exceed 30% of the total funds, but must comprise at least 5% of the total.
• Signature loans may not exceed 12% of the funds invested in all loans (vehicle, consumer, other secured loans, and signature loans).
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The newspaper has only four issues before the end of the semester, but the radio is a 24/7 operation and has two dozen 30 second slots available. Facebook postings must be alternated with the rest of the mindless drivel posted on the college page; thus there is space for only three postings before the end of the semester. Twitter is complicated by the 140 character requirement. The communications director feels she needs five tweets to convey a single message about tours and semesters abroad, so for one message, the cost would be $25 for each of the five components of the single ad. Due to thumb fatigue, she feels that she has only 2800 characters left in her thumbs before the end of the semester. (A side note - During the intersession period, she plans to embark on a strict regimen of thumb yoga to prepare for the coming semester.)

(5) What is an appropriate objective function for this scenario?
A) Max Z = 5,000N + 3,000R + 700T + 200F
B) Max Z = 500N + 250R + 125T + 15F
C) Min Z = 500N + 250R + 125T + 15F
D) Min Z = 5,000N + 3,000R + 700T + 200F
Diff: 1 Page Ref: 128-131
Section Heading: A Marketing Example
Keywords: objective function, model formulation
AACSB: Analytical thinking
(5) Which of these is an appropriate constraint for this scenario?
A) 5,000N + 3,000R + 700T + 200F ≤ 3,500
B) 500N + 250R + 125T + 15F ≤ 3,500
C) N + R + T + F ≥ 36
D) T ≤ 2,800
Diff: 1
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