How many decision variables does the problem have

Reference no: EM132046837

Question: Porter Investments needs to develop an investment portfolio from the following list of possible investments:

Investments	Cost	Expected Return
A	15,000	1,700
B	17,000	1,850
C	8,500	1,400
D	10,000	1,500
E	13,500	1,750
F	13,000	1,650
G	9,000	1,500
H	9,500	1,700

The client can invest up to $100,000. The following conditions should be met: (1) If investment C is chosen, then investment D must also be part of the portfolio, (2) at least four investments should be chosen, (3) of investment A and B, exactly one of these investments should be included, (4) of investments F,G,H - exactly two of these should be included in the portfolio. What investments should be included in the portfolio? Remember the investments is either included or not - it cannot be partially included and multiples of the investment cannot be included. Formulate this as a binary linear program and solve in Excel. The objective should be to maximize total return.

a) How many decision variables does this problem have?

b) Not counting the non-negativity constraint - how many constraints does this problem have?

c) What is the total return for the portfolio?

d) Which investments should be included in the portfolio?

Reference no: EM132046837

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