Ricky, Director of the Treasury Department in BA Bank, is thinking about how he can maximise investment(s) over the next six months. As the economy is highly volatile, Ricky is planning to invest in short-term investment with fixed income. The three options available are as below:

 

Option A	1-month time deposit that pays 0.55%, available each month
Option B	3-month time deposit that pays 1.50%, available in the first 4 months
Option C	6-month time deposit that pays 2.5%, available in the first month only

          * All interest rates are calculated as per annum 

 

The department currently has $2,000,000 cash and the net expenditure for the department for the next 6 months are forecasted as follows:

 

 

Month 1	$300,000
Month 2	($130,000)
Month 3	$203,000
Month 4	($500,000)
Month 5	$610,000
Month 6	($330,000)

 

*Figures in ‘’ ()’’ indicate a net inflow of cash

 

Ricky approached you to help him decide how much the department should invest in each alternative that may be available at the beginning of each month by using a Linear Programming Optimisation model. In addition to the above, Ricky also informs you that he would like all cash available to be invested. However, the department must maintain at least $10,000 at the end of each month for emergency purpose.