Beruflich Dokumente
Kultur Dokumente
HW #1
Chapter 2 - SELF TEST 18
Chapter 2 - SELF TEST 20
Chapter 3 - SELF TEST 28
Chapter 4 - SELF TEST 3
Chapter 5 - SELF TEST 6
Ch. 2 18
For the linear program
Max
4 x1 1x2
s.t.
10 x1 2 x2 30
3 x1 2 x2 12
2 x1 2 x2 10
x1 , x2 0
a. Write this linear program in standard form.
b. Find the optimal solution using the graphical solution
procedure.
c. What are the values of the three slack variables at the
optimal solution?
Ch. 2 20
Embassy Motorcycle (EM) manufactures two lightweight
motorcycles designed for easy handling and safety. The EZRider model has a new engine and a low profile that make it
easy to balance. The Lady-Sport model is slightly larger,
uses a more traditional engine, and is specifically designed
to appeal to women riders. Embassy produces the engines
for both models at its Des Moines, Iowa, plant. Each EZRider engine requires 6 hours of manufacturing time and
each Lady-Sport engine requires 3 hours of manufacturing
time. The Des Moines plant has 2100 hours of engine
manufacturing time available for the next production period.
Embassys motorcycle frame supplier can supply as many
EZ-Rider frames as needed.
Ch. 3 28
National Insurance Associates carries an investment portfolio of
stocks, bonds, and other investment alternatives. Currently $200,000
of funds are available and must be considered for new investment
opportunities. The four stock options National is considering and the
relevant financial data are as follows:
Stock
A
B
C
D
Price per share
$100 $50
$80
$40
Annual rate of return
0.12 0.08 0.06 0.10
Risk measure per dollar invested
0.10 0.07 0.05 0.08
The risk measure indicates the relative uncertainty associated with the
stock in terms of its realizing the projected annual return; higher
values indicate greater risk. The risk measures are provided by the
firms top financial advisor.
Ch. 4 3
The employee credit union at State University is planning
the allocation of funds for the coming year. The credit union
makes four types of loans to its members. In addition, the
credit union invests in risk-free securities to stabilize
income. The various revenue-producing investments
together with annual rates of return are as follows:
Type of Loan/Investment
Automobile loans
Furniture loans
Other secured loans
Signature loans
Risk-free securities
Ch. 5 6
x1
Basis cB 5
2
0
3
zj
cj zj
x2
x3
20 25
1
0
2
1
0 -1/2
s1
s2
s3
0
1
0
0
0
0
1
0
0
0
0
1
40
30
15
EMGT 501
HW #1 Solutions
Chapter 2 - SELF TEST 18
Chapter 2 - SELF TEST 20
Chapter 3 - SELF TEST 28
Chapter 4 - SELF TEST 3
Chapter 5 - SELF TEST 6
Ch. 2 18
(a)
x2
Ch. 2 18
(b)
14
12
10
8
6
Optimal Solution
x1 = 18/7, x2 = 15/7, Value = 87/7
4
2
(c)
s1 = 0, s2 = 0, s3 = 4/7
x1
0
10
Ch. 2 20
(a)
Let E = number of units of the EZ-Rider produced
L = number of units of the Lady-Sport produced
Ch. 2 20
(b)
700
600
Engine
Manufacturing Time
500
400
Frames for Lady-Sport
300
200
100
Assembly and Testing
0
E
100
200
300
400
500
Ch. 2 20
(c)
The binding constraints are the manufacturing time and the
assembly and testing time.
Ch. 3 28
(a)
Let A = number of shares of stock A
B = number of shares of stock B
C = number of shares of stock C
D = number of shares of stock D
To get data on a per share basis multiply price by rate of
return or risk measure value.
Solution:
A = 333.3, B = 0, C = 833.3, D = 2500
Risk: 14,666.7
Return: 18,000 (9%) from constraint 2
Ch. 3 28
(b)
Solution:
Risk:
Return:
A = 1000, B = 0, C = 0, D = 2500
10A + 3.5B + 4C + 3.2D = 18,000
22,000 (11%)
Ch. 3 28
(c)
The return in part (b) is $4,000 or 2% greater, but the risk
index has increased by 3,333.
Obtaining a reasonable return with a lower risk is a preferred
strategy in many financial firms. The more speculative,
higher return investments are not always preferred because
of their associated higher risk.
Ch. 4 3
x1 = $ automobile loans
x2 = $ furniture loans
x3 = $ other secured loans
x4 = $ signature loans
x5 = $ "risk free" securities
Solution
Ch. 5 6
(a)
x1
x2
x3
s1
s2
s3
Basis
cB
20
25
s1
40
s2
30
s3
1/2
15
Z
cj+zj
0
5
20 25
Ch. 5 6
(b)
Ch. 5 6
(c) The original basis consists of s1, s2, and s3. It is the
origin since the nonbasic variables are x1, x2, and x3
and are all zero.
(d) 0
x3 enters because it has the largest negative zj - cj
(e)
and s2 will leave because row 2 has the only positive
coefficient.
(f) 30; objective function value is 30 times 25 or 750.
(g) Optimal Solution:
x1 = 10 s1 = 20
x2 = 0 s2 = 0
x3 = 30 s3 = 0
z = 800.