George Johnson recently inherited a large sum of money;he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 6 percent for the bond fund and 10 percent for the stock fund.Whatever portion of the inheritance he finally decides to commit to the trust fund, he wants to invest atleast 30 percent of that amount in the bond fund. In addition he wants to select a mix that will enable him to obtain a total return of atleast 7.5 percent. A) Formulate a linear programming model that can be used to determaine the percentage that should be allocated to each of the possible i nvestment alternatives B) Solve the problem using the graphical solution procedure.

George Johnson recently inherited a large sum of money;he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 6 percent for the bond fund and 10 percent for the stock fund.Whatever portion of the inheritance he finally decides to commit to the trust fund, he wants to invest atleast 30 percent of that amount in the bond fund. In addition he wants to select a mix that will enable him to obtain a total return of atleast 7.5 percent. A) Formulate a linear programming model that can be used to determaine the percentage that should be allocated to each of the possible i nvestment alternatives B) Solve the problem using the graphical solution procedure.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section: Chapter Questions

Problem 80P

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George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 5% for the bond fund and 30% for the stock fund. Whatever portion of the inheritance George finally decides to commit to the trust fund, he wants to invest at least 80% of that amount in the bond fund. In addition, he wants to select a mix that will enable him to obtain a total return of at least 6.5%. Formulate a linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. If required, round your answers to three decimal places. Let B = percentage of funds invested in the bond fund S = percentage of funds invested in the stock fund
George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 5% for the bond fund and 30% for the stock fund. Whatever portion of the inheritance George finally decides to commit to the trust fund, he wants to invest at least 80% of that amount in the bond fund. In addition, he wants to select a mix that will enable him to obtain a total return of at least 6.5%. Formulate a linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. If required, round your answers to three decimal places. Let B = percentage of funds invested in the bond fund S = percentage of funds invested in the stock fund fill in the blank 2 B + fill in the blank 3 S s.t.…