1 Western Community Bank has $1,875,000 infunds that it is allocating to various types ofloans: personal loans, student loans, small-business loans. Assume that the annual ratesof return are 9% for the personal loans, 10%for the student loans, and 7% for the small-business loans. The amount allocated to thestudent loans must be atmost 60% of theamount allocated to the personal loans.Assume that the small-business loans musthave at least 35% of the available funds. Thebank wishes to determine the amount thatshould be allocated to each type of loan tomaximize the total annual return on the fundspart a) For the application described above,develop a complete LP model below, withdecision variables, objective function andconstraints.part b) Proceed to create a spreadsheetmodelpart c) Solve the LP for the optimal solutionand provide the optimal solutionpart e) Without re-solving the optimizationproblem with different inputs, if the fundamount decreased to $1,500,000, what wouldbe the new total annual return on the funds.Explain how you arrived at your answer.

As per guidelines, only first three subparts are done. a) Let P, S, Sb represent personal,…

part a) For the application described above, develop a complete LP model below, with decision variables, objective function and constraints. part b) Proceed to create a spreadsheet model part c) Solve the LP for the optimal solution and provide the optimal solution

part a) For the application described above, develop a complete LP model below, with decision variables, objective function and constraints. part b) Proceed to create a spreadsheet model part c) Solve the LP for the optimal solution and provide the optimal solution

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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