Home work assistance

Anonymous
timer Asked: May 2nd, 2017

Question description

1.The Employee Credit Union at Directional State University is planning the allocation of funds for the coming year.ECU makes four types of loans and has three additional investment instruments.Each loan/investment has a corresponding risk and liquidity factor (on a scale of 0-100, with 100 being the most risky/liquid).The various revenue-producing instruments are summarized in the table below:

Instrument

Annual Rate of Return (%)

Risk Factor

Liquidity Factor

Automobile loans

8

50

0

Furniture loans

10

60

0

Other secured loans

11

70

0

Unsecured loans

14

80

0

Risk-free securities

5

0

100

Corporate stock fund

9

60

90

Corporate bond fund

8

50

80

ECU has $2,000,000 available for investment during the coming year.However, state laws and pesky stakeholders impose certain restrictions on choice of investment instruments.Risk-free securities may not exceed 40% of total funds available for investment.Unsecured loans may not exceed 10% of total funds invested in loans.The funds invested in automobile loans must not be less than the total of funds invested in furniture and other secured loans.The average risk factor may not exceed 60, and the average liquidity factor must be at least 40.Formulate a linear program for ECU.(14)

Check each of the following that apply.

There are seven decision variables.____

There are six constraints (not counting nonnegativity).____

We determine the average risk factor by summing risk values and dividing by 7.____

Risk-free security total investment may exceed $800,000.____

All $2,000,000 must be invested.____

This is a maximization problem.____

This problem cannot be run as an integer program.____

  1. A local company orders a component part at $40/unit.The cost of placing an order is $100, and the annual cost of holding a unit in inventory is 20%.Current annual demand is 10,000 units, demand is treated as known and at a constant rate, and backorders are not allowed.(16)

Check all that apply.

This is a basic EOQ problem.____

The optimal order quantity is greater than 500 units.____

If their current order policy is to order 600 units, the total annual cost would increase.____

If the holding cost were to increase to 25%, the optimal order quantity would increase.____

If they started to produce this component, total cost would decline.____

If annual demand changed to 20,000 units, the optimal order quantity would double.____

If the order cost increased, the optimal number of orders/year would decrease.____

In this model, the service level is 100%.____

  1. In #2, suppose you receive a quantity discount such that for orders of at least 600 the cost per unit of the component is $38?(8)

Check all that apply.

The optimal order quantity (EOQ) for $38 would be the optimal order quantity for the overall problem.____

The optimal order quantity would be the same as in #2.____

The optimal order quantity would be larger than in #2.

The procurement cost is not relevant since it is incurred regardless of order quantity.____

  1. See the following Management Scientist output.In this problem, we are trying to determine the optimal number of rolls of four types of fabric (1, 2, 3, and 4) to produce.Note that the third constraint concerns the available quantity of a certain chemical resin used for each type of fabric, the fourth constraint concerns the available quantity of polyester, and the final two constraints are imposed to ensure that we will incur a $200 penalty if we produce at least 600 units of Types 2 and 4 (since this will require us to redeploy an additional production line).
  1. Which constraints are binding? (2)

_________

  1. Which constraint would we prefer to see relaxed? (2)

________

  1. Nora in Accounting realized that the profit associated with Type 1 fabric should be $8.00/unit.Will this have an effect on the optimal solution?(2)

Yes_____

No______

  1. If the availability of the chemical (third constraint) were 15,000, what effect would this have?(2)

None____

Increase the optimal profit______

Decrease the final profit______

LINEAR PROGRAMMING PROBLEM

MAX 6X1+7X2+4X3+7X4-200X5

S.T.

1)1X1+1X2+1X3<1000

2)1X3-1X4>20

3)4X1+4X2+3X3+3X4<12000

4)3X1+6X2+4X3+5X4<14000

5)1X2+1X4-600X5>0

6)1X2+1X4-380X5<600

OPTIMAL SOLUTION

Objective Function Value =10660.000

VariableValueReduced Costs

-----------------------------------------------

X10.0004.474

X20.0004.000

X31000.000 0.000

X4980.0000.000

X51.0000.000

ConstraintSlack/SurplusDual Prices

-----------------------------------------------

10.00010.474

20.000-6.474

36060.0000.000

45100.0000.000

5380.0000.000

60.0000.526


OBJECTIVE COEFFICIENT RANGES

VariableLower LimitCurrent ValueUpper Limit

---------------------------------------------------------

X1No Lower Limit6.00010.474

X2No Lower Limit7.00011.000

X30.0004.000No Upper Limit

X43.0007.000No Upper Limit

X5-1900.000-200.0000.000

RIGHT HAND SIDE RANGES

ConstraintLower LimitCurrent ValueUpper Limit

---------------------------------------------------------

1620.0001000.0001566.667

2-636.36420.000400.000

35940.00012000.000No Upper Limit

48900.00014000.000No Upper Limit

5No Lower Limit0.000380.000

6359.333600.000980.000

Tutor Answer

(Top Tutor) Studypool Tutor
School: UT Austin
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors