Alisa is a newly hired fund manager at TD Bank and she is responsible for allocating $1 million in new funds. The funds can be distributed between mortgages, personal line of credit, or car loans. The annual rate of return for these types of loans are 6% for the mortgage, 11% for the personal line of credit, and 8% for the car loan. TD’s planning committee has asked for at least 40% of the funds to be allocated to mortgages. Additionally, the amount going towards the personal line of credit cannot exceed 60% of the car loans.

a) Develop a linear programming model to help Alisa decide on how much money should be allocated to each type of fund such that the bank maximizes the total annual return.

b) Solve the problem using the knowledge you have gained from class and remember to show all steps involved.

c) Provide a managerial statement that summarizes your solution for Alisa.