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Investment Allocation Widget Production Hotel Occupancy Cruise Ships Conclusion MATH 105: Finite Mathematics 3-3: Linear Programming Story Problems Prof. Jonathan Duncan Walla Walla College Winter Quarter, 2006 Investment Allocation


  1. Investment Allocation Widget Production Hotel Occupancy Cruise Ships Conclusion MATH 105: Finite Mathematics 3-3: Linear Programming Story Problems Prof. Jonathan Duncan Walla Walla College Winter Quarter, 2006

  2. Investment Allocation Widget Production Hotel Occupancy Cruise Ships Conclusion Outline Investment Allocation 1 Widget Production 2 Hotel Occupancy 3 Cruise Ships 4 Conclusion 5

  3. Investment Allocation Widget Production Hotel Occupancy Cruise Ships Conclusion Outline Investment Allocation 1 Widget Production 2 Hotel Occupancy 3 Cruise Ships 4 Conclusion 5

  4. Investment Allocation Widget Production Hotel Occupancy Cruise Ships Conclusion Investments: Problem Set-up Example An investment broker wants to invest up to $20,000. She can purchase type A bonds yielding a 10% return and she can purchase a more risky type B bounds yielding a 15% return. She wants to invest at least as much in the type A bond as in the type B bond to reduce her risk. The minimum investment for the type A bond is $5,000, and there are only $8,000 worth of type B bonds available. How much should the broker invest in each type of bond to maximize her returns?

  5. Investment Allocation Widget Production Hotel Occupancy Cruise Ships Conclusion Investments: Problem Set-up Example An investment broker wants to invest up to $20,000. She can purchase type A bonds yielding a 10% return and she can purchase a more risky type B bounds yielding a 15% return. She wants to invest at least as much in the type A bond as in the type B bond to reduce her risk. The minimum investment for the type A bond is $5,000, and there are only $8,000 worth of type B bonds available. How much should the broker invest in each type of bond to maximize her returns? Constraints: Let: x be amount invested in A  + 20 , 000 x y ≤ y the amount invested in B   x ≥ y    5 , 000 x ≥ Objective: 8 , 000 y ≤  Maximize 0 . 10 x + 0 . 15 y    0 y ≥ 

  6. Investment Allocation Widget Production Hotel Occupancy Cruise Ships Conclusion Investments: Locating Corner Points Example Continued. . . The region obtained from the constraints is shown below.

  7. � ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ � � ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � ✁ � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � ✁ Conclusion Cruise Ships The region obtained from the constraints is shown below. Hotel Occupancy Investments: Locating Corner Points Widget Production x+y=20000 y=8000 Example Continued. . . y=x x=5000 Investment Allocation

  8. ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ � � � ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ � ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ ✁ � � ✁ � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � ✁ � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � ✁ Conclusion (12000 , 8000) (5000 , 5000) (8000 , 8000) Cruise Ships (20000 , 0) The region obtained from the constraints is shown below. (5000 , 0) Point y = 8000 and x + y = 20000 y = 0 and x + y = 20000 x = 5000 and y = x y = 8000 and y = x x = 5000 and y = 0 Intersecting Lines Hotel Occupancy Investments: Locating Corner Points Widget Production x+y=20000 y=8000 Example Continued. . . y=x x=5000 Investment Allocation

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