A Bank is in the process of formulating its loan policy. Involving a maximum of Rs.600 Million. Table below gives the relevant types of loans. Bad debts are not recoverable and produce no interest receive. To meet competition from other Banks the following policy guidelines have been set. At least 40% of the funds must be allocated to the agricultural and commercial loans. Funds allocated to housing must be at least 50% of all loans given to personal, car, Housing. The overall bad debts on all loans may not exceed 0.06. Formulate a linear program Model to determine optimal loan allocations. Type of loan Personal Car Housing Agricultural Interest rate % Bad debts (Probability) 17 0.10 14 0.07 11 0.05 10 0.08 Commercial 13 0.06
A Bank is in the process of formulating its loan policy. Involving a maximum of Rs.600 Million. Table below gives the relevant types of loans. Bad debts are not recoverable and produce no interest receive. To meet competition from other Banks the following policy guidelines have been set. At least 40% of the funds must be allocated to the agricultural and commercial loans. Funds allocated to housing must be at least 50% of all loans given to personal, car, Housing. The overall bad debts on all loans may not exceed 0.06. Formulate a linear program Model to determine optimal loan allocations. Type of loan Personal Car Housing Agricultural Interest rate % Bad debts (Probability) 17 0.10 14 0.07 11 0.05 10 0.08 Commercial 13 0.06
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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![A Bank is in the process of formulating its loan policy. Involving a maximum of Rs.600 Million. Table below gives the
relevant types of loans. Bad debts are not recoverable and produce no interest receive. To meet competition
from other Banks the following policy guidelines have been set. At least 40% of the funds must be allocated to the
agricultural and commercial loans. Funds allocated to housing must be at least 50% of all loans given to personal,
car, Housing. The overall bad debts on all loans may not exceed 0.06.
Formulate a linear program Model to determine optimal loan allocations.
Type of loan
Interest rate %
Bad debts (Probability)
Personal
17
0.10
Car
Housing
Agricultural
Commercial
14
0.07
11
0.05
10
0.08
13
0.06](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F61dbc1a7-c67d-4684-ad66-f6cf41d07084%2Ff1890111-261f-4bb0-a17a-001868d820d8%2F4o1se5_processed.png&w=3840&q=75)
Transcribed Image Text:A Bank is in the process of formulating its loan policy. Involving a maximum of Rs.600 Million. Table below gives the
relevant types of loans. Bad debts are not recoverable and produce no interest receive. To meet competition
from other Banks the following policy guidelines have been set. At least 40% of the funds must be allocated to the
agricultural and commercial loans. Funds allocated to housing must be at least 50% of all loans given to personal,
car, Housing. The overall bad debts on all loans may not exceed 0.06.
Formulate a linear program Model to determine optimal loan allocations.
Type of loan
Interest rate %
Bad debts (Probability)
Personal
17
0.10
Car
Housing
Agricultural
Commercial
14
0.07
11
0.05
10
0.08
13
0.06
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