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Section 5 : Linear Progamming applications (2)

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Zakaria Hasaneen
Zakaria Hasaneen

Grade 4: OR Section Term 2 Section 5 Linear Programming applications (2) Youtube: https://youtu.be/EyeY9p8jooE

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By: Zakaria Elsayed Hasaneen Teaching Assistant at Faculty of Commerce Accounting Department (English Section) Kafrelsheikh University OR Section (5) Linear Progamming applications (2) Grade 4 ¨CTerm 2 Zakaria Hasaneen Zakaria Hasaneen Zakaria Hasaneen
Portfolio selection Problem ZAK Trust must decide how to invest $8 million . Investment Projected Return Risk Factor Petroleum 14% 5 Stocks 16.5% 7 Gold 10% 2 Real Estate 12% 3
Required : How much should ZAK invest in these alternatives to maximize dollar return on investment? A. No single investment alternative should account for more than 40% of budget. B. A mount invested in Gold and Real Estate combined must be at least twice that invested in in Petroleum C. The risk associated with Stocks should not exceed twice the risk associated with Real Estate . D. Investment in real estate should exceed investment in Stocks by no more than $1 Million. E. Average risk factor should be no more than 5. Guidelines:
Decision variables
Objective Function
ZAK Trust must decide how to invest $8 million .
A.No single investment alternative should account for more than 40% of budget.
Section 5 : Linear Progamming applications (2)
B- A mount invested in Gold and Real Estate combined must be at least twice that invested in Petroleum
C- The risk associated with Stocks should not exceed twice the risk associated with Real Estate .
D-Investment in real estate should exceed investment in Stocks by no more than $1 Million.
E-Average risk factor should be no more than 5.
Non-negativity constraints
Transportation Problem LP Formulation
Section 5 : Linear Progamming applications (2)
Section 5 : Linear Progamming applications (2)
Section 5 : Linear Progamming applications (2)
Section 5 : Linear Progamming applications (2)
Section 5 : Linear Progamming applications (2)

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Section 5 : Linear Progamming applications (2)

  • 1. By: Zakaria Elsayed Hasaneen Teaching Assistant at Faculty of Commerce Accounting Department (English Section) Kafrelsheikh University OR Section (5) Linear Progamming applications (2) Grade 4 ¨CTerm 2 Zakaria Hasaneen Zakaria Hasaneen Zakaria Hasaneen
  • 2. Portfolio selection Problem ZAK Trust must decide how to invest $8 million . Investment Projected Return Risk Factor Petroleum 14% 5 Stocks 16.5% 7 Gold 10% 2 Real Estate 12% 3
  • 3. Required : How much should ZAK invest in these alternatives to maximize dollar return on investment? A. No single investment alternative should account for more than 40% of budget. B. A mount invested in Gold and Real Estate combined must be at least twice that invested in in Petroleum C. The risk associated with Stocks should not exceed twice the risk associated with Real Estate . D. Investment in real estate should exceed investment in Stocks by no more than $1 Million. E. Average risk factor should be no more than 5. Guidelines:
  • 6. ZAK Trust must decide how to invest $8 million .
  • 7. A.No single investment alternative should account for more than 40% of budget.
  • 9. B- A mount invested in Gold and Real Estate combined must be at least twice that invested in Petroleum
  • 10. C- The risk associated with Stocks should not exceed twice the risk associated with Real Estate .
  • 11. D-Investment in real estate should exceed investment in Stocks by no more than $1 Million.
  • 12. E-Average risk factor should be no more than 5.