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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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