Reconsider the welte mutual funds problem from section 42, Ask an Expert

Management Studies

Reconsider the Welte Mutual Funds problem from Section 4.2. Define your decision variables as the fraction of funds invested in each security. Also, modify the constraints limiting investments in the oil and steel industries as follows: No more than 50% of the total funds invested in stock (oil and steel) may be invested in the oil industry, and no more than 50% of the funds invested in stock (oil and steel) may be invested in the steel industry.

a. Solve the revised linear programming model. What fraction of the portfolio should be invested in each type of security?

b. How much should be invested in each type of security?

c. What are the total earnings for the portfolio?

d. What is the marginal rate of return on the portfolio? That is, how much more could be earned by investing one more dollar in the portfolio?

Text Book: An Introduction to Management Science: Quantitative Approaches to Decision. By David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Camm, James Cochran.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91592177

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