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Business
Operations Management
Fund 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Risk High High High High High High Medium Medium Medium Medium Medium Low Low Low Low Low Low Type Stock Stock Stock Stock Stock Stock Blend Blend Blend Blend Blend Blend Bond Bond Bond Bond Return 11.98% 13.18% 9.40% 7.71% 8.35% 16.38% 4.10% 12.52% 8.62% 11.14% 8.78% 9.44% 8.38% 7.65% 6.90% 5.53% 6.30% His financial advisor has suggested that at most 40% of the portfolio should be composed of high-risk funds. At least 25% should be invested in bond funds, and at most 40% can be invested in any single fund. At least six funds should be selected, and if a fund is selected, it should be funded with at least 5% of the total contribution. Develop and solve an integer optimization model to determine which funds should be selected and what percentage of his total investment should be allocated to each fund.

Fund 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Risk High High High High High High Medium Medium Medium Medium Medium Low Low Low Low Low Low Type Stock Stock Stock Stock Stock Stock Blend Blend Blend Blend Blend Blend Bond Bond Bond Bond Return 11.98% 13.18% 9.40% 7.71% 8.35% 16.38% 4.10% 12.52% 8.62% 11.14% 8.78% 9.44% 8.38% 7.65% 6.90% 5.53% 6.30% His financial advisor has suggested that at most 40% of the portfolio should be composed of high-risk funds. At least 25% should be invested in bond funds, and at most 40% can be invested in any single fund. At least six funds should be selected, and if a fund is selected, it should be funded with at least 5% of the total contribution. Develop and solve an integer optimization model to determine which funds should be selected and what percentage of his total investment should be allocated to each fund.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Fund 1 2 3 4 5 6 7 CO 8 9 10 1231 11 12 13 14 15 16 17 Risk High High High High High High Medium Medium Medium Medium Medium Low Low Low Low Low Low Туре Stock Stock Stock Stock Stock Stock Blend Blend Blend Blend Blend Blend Blend Bond Bond Bond Bond Return 11.98% 13.18% 9.40% 7.71% 8.35% 16.38% 4.10% 12.52% 8.62% 11.14% 8.78% 9.44% 8.38% 7.65% 6.90% 5.53% 6.30% His financial advisor has suggested that at most 40% of the portfolio should be composed of high-risk funds. At least 25% should be invested in bond funds, and at most 40% can be invested in any single fund. At least six funds should be selected, and if a fund is selected, it should be funded with at least 5% of the total contribution. Develop and solve an integer optimization model to determine which funds should be selected and what percentage of his total investment should be allocated to each fund.
Transcribed Image Text:Fund 1 2 3 4 5 6 7 CO 8 9 10 1231 11 12 13 14 15 16 17 Risk High High High High High High Medium Medium Medium Medium Medium Low Low Low Low Low Low Туре Stock Stock Stock Stock Stock Stock Blend Blend Blend Blend Blend Blend Blend Bond Bond Bond Bond Return 11.98% 13.18% 9.40% 7.71% 8.35% 16.38% 4.10% 12.52% 8.62% 11.14% 8.78% 9.44% 8.38% 7.65% 6.90% 5.53% 6.30% His financial advisor has suggested that at most 40% of the portfolio should be composed of high-risk funds. At least 25% should be invested in bond funds, and at most 40% can be invested in any single fund. At least six funds should be selected, and if a fund is selected, it should be funded with at least 5% of the total contribution. Develop and solve an integer optimization model to determine which funds should be selected and what percentage of his total investment should be allocated to each fund.
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