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Banks in Ghana are constantly looking for ways to increase their profits while minimizing costs. One area that banks focus on is their product offerings,
Banks in Ghana are constantly looking for ways to increase their profits while minimizing costs. One area that banks focus on is their product offerings, as different products require varying amounts of resources and labour. To optimize their operations, the banks can use linear programming to determine the optimal product mix that maximizes profits while staying within resource constraints. Consider a midsized bank like Baroda Bank, that offers four main products: personal loans, mortgages, Debit cards, and car loans. Each product has specific requirements in terms of resources, such as personnel, marketing, and loan officers. To maximize profits while managing resources effectively, the bank must find the right balance of product offerings. The bank has six resource constraints: personnel, marketing budget, loan officers, computer systems, office space, and loan capital. The amounts of each resource available are Personnel: employees, Marketing budget: GHc Loan officers: Computer systems: Office space: square meters, Loan capital: GHc million. Barodas production requirements for each product are: Personal loans: personnel, GHc marketing, loan officer, computer system, square meters office space, GHc loan capital, and hours of labour Mortgages: personnel, GHc marketing, loan officers, computer systems, square meters office space, GHc loan capital, and hours of labour Debit cards: personnel, GHc marketing, loan officers, computer system, square meters office space, GHc loan capital, and hour of labour Car loans: personnel, GHc marketing, loan officers, computer system, square meters office space, GHc loan capital, and hours of labour Baroda makes the following profits for each product: Personal loans: GHc Mortgages: GHc Debit cards: GHc Car loans: GHc The bank wants to maximize its profits while staying within its resource constraints.
All answers with decimals must be to decimal places
Model the entire problem with Microsoft Excel Solver and answer the following question.
a What are the coefficient for Mortgage and Debit Cards, respectively? Blank Fill in the blank, read surrounding text. Blank Fill in the blank, read surrounding text.
b State the optimal Solution values or value? Blank Fill in the blank, read surrounding text.
c What is the Objective Function Value? Blank Fill in the blank, read surrounding text.
d Identify all the Binding Constraints? Blank Fill in the blank, read surrounding text.
e Is Loan Capital a binding constraints? Blank Fill in the blank, read surrounding text.
f Compute the maximum profit for Mortgage? Blank Fill in the blank, read surrounding text.
g Compute the minimum profit required for Car Loans? Blank Fill in the blank, read surrounding text.
h What is the Shadow price value for the binding constraints? Blank Fill in the blank, read surrounding text.
i From the sensitivity report, which resources must receive additional inputs? Blank Fill in the blank, read surrounding text.
j What should be the maximum unit profit for Personal Loans for the optimal solution to change?
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