Don't solve, just formulate. A Bank is in the process of formulating its loan policy. Involving a maximum of Rs.600 Million. Table below gives therelevant types of loans. Bad debts are not recoverable and produce no interest receive. To meet competitionfrom other Banks the following policy guidelines have been set. At least 40% of the funds must be allocated to theagricultural and commercial loans. Funds allocated to housing must be at least 50% of all loans given to personal,car, Housing. The overall bad debts on all loans may not exceed 0.06.Formulate a linear program Model to determine optimal loan allocations.Type of loanInterest rate %Bad debts (Probability)Personal170.10CarHousingAgriculturalCommercial140.07110.05100.08130.06

Given - Loans Interest Rates Probabilities Personal 17 0.10 Car 14 0.07 Housing 11 0.05…

Answered: A Bank is in the process of formulating…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter6: Optimization Models With Integer Variables

Section: Chapter Questions

Problem 84P

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