Integer Program Examples - Mercer University



1) You have $14,000 to invest in any of 4 investments. The following table indicates how much is needed in order to purchase the investment and the expected value of the investment after one year. You cannot partially invest in the investments (must fully purchase or not purchase). How do you maximize your investment?

Investment Purchase Price Expected Value at year end

1 $5 $16

2 $7 $22

3 $4 $12

4 $3 $ 8

1) You have $14,000 to invest in any of 4 investments. The following table indicates how much is needed in order to purchase the investment and the expected value of the investment after one year. You cannot partially invest in the investments (must fully purchase or not purchase). How do you maximize your investment?

Investment Purchase Price(000s) Expected Value at year end (000s)

1 $5 $16

2 $7 $22

3 $4 $12

4 $3 $ 8

Let xi = 1 if investment i is made

0 if not

Max Z = 16x1 + 22x2 + 12x3 + 8x4

s.t 5x1 + 7x2 + 4x3 + 3x4 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download