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Herbes de Provence produces jams, jellies and oils using th eir home-grown herbs. They are planning to expand their product line to include soaps ,

Herbes de Provence produces jams, jellies and oils using their home-grown herbs. They are planning to expand their product line to include soaps, shampoos, lotions, and other personal care products featuring their herbs. Construction of the new facility will cost $450,00. The end-of-month payment schedule is provided below along with the different start-of-month investment options for creating a sinking fund to meet the payments.

Formulate an LP to meet the required schedule while placing the least amount of money into the sinking fund. Do NOT solve.

Payment schedule:

End of month:

1

2

3

4

5

6

7

Amount due ($1000s)

$150

$0

$100

$0

$75

$75

$50

Investments available:

Investment

Available start of month:

Months to Maturity

Yield at Maturity(end of month)

A

1

7

10.5 %

B

1, 3

5

6.1 %

C

1, 4

4

5.5 %

D

1, 3, 5

3

4.7 %

E

1, 2, 3, 4, 5, 6, 7

1

3.6 %

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