Take Home Exercise 4

1. Mr. X invested a part of his investment in 10% bond A and a part in 15% bond B. His
interest income during the first year is USD 4,000. If he invests 20% more in 10% bond A
and 10 % more in 15% bond B, his income during the second year increases by USD 500.
Find his initial investment and the new investment in bonds A and B using matrix
method

2. An automobile company uses three types of steel s 1, s2 and s3 for producing three types
of cars c1, c2 and c3. The steel requirement (in tons) for each type of car is given below:

Determine the number of cars of each type which can be produced using 29, 13 and
16tons of steel of the three types respectively.
3. Consider an open economy with three industries: coal-mining operation, electricity-
generating plant and an auto-manufacturing plant. To produce Re 1 of coal, the mining
operation must purchase $0.1 of its own production, $0.30 of electricity and $0.1 worth
of automobile for its transportation. To produce Re 1 of electricity, it takes $0.25 of coal,
$0.4 of electricity and $ 0.15 of automobile. Finally, to produce $1 worth of automobile,
the auto-manufacturing plant must purchase 0.2 of coal, $0.5 of electricity and
consume $0.1 of automobile. Assume also that during a period of one week, the
economy has an exterior demand of $50,000 worth of coal, $75,000 worth of electricity,
and$1,25,000 worth of autos. Find the production level of each of the three industries in
that period of one week in order to exactly satisfy both the internal and the external
demands.

Linear Programming
1. A manufacturing company makes two models A and B of a product. Each piece of Model
A requires 9 labour hours for fabricating and 1 labour hour for finishing. Each piece of
Model B requires 12 labour hours for fabricating and 3 labour hours for finishing. For
fabricating and finishing, the maximum labour hours available are 180 and 30
respectively. The company makes a profit of USD 8000 on each piece of model A and
USD 12000 on each piece of Model B. How many pieces of Model A and Model B should
 be manufactured per week to realize a maximum profit? What is the maximum profit
per week?
1
2. A small business enterprise makes dresses and trousers. To make a dress requires
2
hour of cutting and 20 minutes of stitching. To make a trouser requires 15 minutes of
1
cutting and hour of stitching. The profit on a dress is $40 and on a pair of trousers
2
$50. The business operates for a maximum of 8 hours per day. Determine how many
dresses and trousers should be made to maximize profit and what the maximum profit
is.