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As a managerial accountant at NASA trust funds company, your boss Faisal recently asked you for help with their investment problem. The problem is as
As a managerial accountant at NASA trust funds company, your
boss Faisal recently asked you for help with their investment
problem. The problem is as follows: the company has $ in
their cash budget, and would like to use this money to set up an
investment portfolio. As an initial investment strategy, Faisal would
like to restrict the portfolio to a mix of the following investment
options:
Following the strategic policy of the NASA company, the money
allocated to the banking sector stocks must not exceed $ and
the money allocated to the industrial sector stocks must not exceed
$ Furthermore, the money allocated to the money market
fund must at least be of the money allocated to the industrial
sector stocks, and the money allocated to the investment option with
the highest expected rate of return must not exceed of the
money allocated to the sector that this investment option belongs to
Instruction:
Formulate a linear programming model that can be used to
determine the percentage that should be allocated to each of
the possible investment options.
Solve the problem using the simplex method.
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