Sansuit Investments is deciding on future investment for the coming two years. The company considered four bonds to choose from and their investment details for the next two years are given in the table below:

The net worth of these four bonds is $75,000, $40,000, $25,500, and $18,000, respectively. The funds available with the company for Year 1 and Year 2 are $35,000 and $62,000, respectively. a. Develop and solve a binary integer programming model for maximizing the net worth assuming that only one of the bonds can be considered.
b. Suppose the investment has to be made on Bond B, and only two of the four bonds can be considered for investment. Modify your formulation from part a. to reflect this new situation. Of these two options, which is better?

Question

Sansuit Investments is deciding on future investment for the coming two years. The company considered four bonds to choose from and their investment details for the next two years are given in the table below:
  
The net worth of these four bonds is $75,000, $40,000, $25,500, and $18,000, respectively. The funds available with the company for Year 1 and Year 2 are $35,000 and $62,000, respectively. a. Develop and solve a binary integer programming model for maximizing the net worth assuming that only one of the bonds can be considered.
b. Suppose the investment has to be made on Bond B, and only two of the four bonds can be considered for investment. Modify your formulation from part a. to reflect this new situation. Of these two options, which is better?

Quizplus · Accepted Answer

The Answer of Sansuit Investments is deciding on future investment for the coming two years. The company considered four bonds to choose from and their investment details for the next two years are given in the table below:
  
The net worth of these four bonds is $75,000, $40,000, $25,500, and $18,000, respectively. The funds available with the company for Year 1 and Year 2 are $35,000 and $62,000, respectively. a. Develop and solve a binary integer programming model for maximizing the net worth assuming that only one of the bonds can be considered.
b. Suppose the investment has to be made on Bond B, and only two of the four bonds can be considered for investment. Modify your formulation from part a. to reflect this new situation. Of these two options, which is better?

Sansuit Investments Is Deciding on Future Investment for the Coming