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Develop an LP model that represents the problem. Please clearly state decision variables, objective and constraints

INSTRUCTIONS TO CANDIDATES
ANSWER ALL QUESTIONS

Quantitative Methods

Important Note: Grading of TMA/GBA/ECA Submissions

Marks awarded to your assignment are based on the following guidelines:

1. 80% of the marks are allocated to the content of your answers:

The marks awarded to what your answers cover depend on the extent to which they cover the key points that correctly and comprehensively address each question.

The key points should be supported by evidence drawn from course materials and, wherever relevant, from other credible sources.

2. 20% of the marks are allocated to the presentation of your answers:

Wherever applicable, the marks awarded to how your answers are presented depend on the extent to which your answers:

form a sound reasoning by developing those key points in a clear, logical and succinct manner;

provide proper and adequate in-text citations and referencing to content drawn from course materials and other credible sources;

strictly follow APA formatting and style guidelines1, in particular for:

in-text citations and end-of-report references;

the identification of figures and tables;

use, wherever relevant, the specialised vocabulary and terminology commonly used in discussions about the topic(s) covered by each question;

provide a reference or bibliography at the end of the main report;

include the less relevant details in an Appendix;

use sentence constructions that are grammatically and syntactically correct;

are free from spelling mistakes; present the workings, numerical formulations and results in a logical manner that follows the APA formatting and style guidelines;

design and present graphs, diagrams and plots that follow the APA formatting and style guidelines;

are highly original;

have proper formatting, which may:

include a properly formatted cover page;

respect the answer length/word count set out in the assignment guidelines, if any is prescribed;

present answers in paragraphs with proper spacing and page margins;

include page numbers and appendices, if necessary.

Question 1

This question is about the application of Linear Programming (LP). Parts (a) and (b) are in a company setting, and part (c) is in your daily life setting.

(a) TradeCo wants to invest at most $10,000 in 2021. Two investment options are proposed: STK and BD, with annual yields of 20% and 10% respectively. Based on market research, TradeCo wishes to limit the amount invested in STK to no more than 60% of the total investment. How should TradeCo invest to generate the highest annual yield?

Develop an LP model that represents the problem. Please clearly state decision variables, objective and constraints. You do not need to solve it. Please limit the answer to within one page. (15 marks)

(b) Suppose that TradeCo imposes one more restriction: investment in BD should be at least   times the investment in STK where   is a non-negative constant. Find the optimal solution to the problem and discuss how the value of would affect TradeCo’s best investment decision and annual yield. Please limit the answer to within two pages. [Hint: use the graphical method and solve for the optimal solution in terms of .] (25 marks)

(c) Identify one (1) application of LP in production scheduling, plant layout, or logistics. Please describe the problem and explain why LP is suitable for solving the problem. You do not need to formulate the problem as an LP or solve it. Please limit the answer to within 400 words.

(60 marks)

(5/5)
Attachments:

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