Can you please solve the linear function with clear steps. it is better to be graphically instead of using excel
Can you please solve the linear function with clear steps. it is better to be graphically instead of using excel
First let us define the variables x1 as the stocks and x2 as bonds.
Now since the objective is to maximize the returns, the objective function will be:
Max Z = 0.18x1 + 0.06x2
Constraints:
To restrict the total amount to be invested: x1 + x2 <= 720000
To restrict the total losses the constraint is: 0.22x1 + 0.05x2 <= 100000
Now, to make the portfolio to not include more than 65% as stocks:
x1 <= 0.65*(x1+x2)
or
x1 <= 0.65x1 + 0.65x2
x1 - 0.65x1 - 0.65x2 <= 0
so we can reformulate it as 0.35x1 - 0.65x2 <= 0
To make the variables non-negative: x1,x2 >= 0
Final LPP:
Max Z = 0.18x1 + 0.06x2
s.t.
x1 + x2 <= 720000
0.22x1 + 0.05x2 <= 100000
0.35x1 - 0.65x2 <= 0
and x1,x2 > = 0
Step by step
Solved in 2 steps with 1 images
