Loans Let's assume Annual rate of return %

Automobile a 8 0.08a
Furniture b 10 0.10b
other secured c 11 0.11c
signature d 12 0.12d
risk free securities e 9 0.09e

Max
0.08a + 0.10b + 0.11c + 0.12d + 0.09e

Constraints
e <= 600,000
0.10 (a+b+c+d) <= d
c + d <= e
a + b + c + d + e = 2,000,000
a, b, c, d, e >= 0
b + c <= a

Segments a b c
Minimum cost 0.08 0.1 0.11
Constraints
e <= 600000 0 0 0
0.10 (a+b+c) <= 0.90d 0.1 0.1 0.1
c+d<=e 0 0 460000
a+b+c+d+e 630000 170000 460000
b+c<=a 630000 170000 460000

Max profit 188800 9.44%

 Optimal solution
630000
170000
460000
140000
600000

e <= 600,000
10 (a+b+c+d) <= d
c + d <= e
+ c + d + e = 2,000,000
a, b, c, d, e >= 0
b + c <= a

d e
0.12 0.09
limit
0 600000 600000 600000
0.9 0 0 2.91038E-11
140000 0 600000 600000
140000 600000 2000000 2000000
0 0 630000 630000
 Loans Let's assume Cost / lbs ($)
Bean 1 a 0.05
Bean 2 b 0.7
Bean 3 c 0.45

Min Cost for 1 lbs

0.5a + 0.7b + 0.45c

Constrains
1000a <= 500
1000b <= 600
1000c <= 400
86a + 88b + 75c >= 80
75a + 85b + 60c >= 75
a+b+c=1
a,b,c >= 0

Beans in 1 lbs a b
Minimum cost 0.5 0.7

Constraints
1000a <= 500 0
1000b <= 600 0.6
1000c <= 400
86a + 88b + 75c >= 80 86 88
75a + 85b + 60c >= 75 75 85
a+b+c=1 0 0.6

Min cost for 1lbs $0.60

Min cost fro 1000 lbs $600.00

Rating
Taste 82.8
Aroma 75

Cost per lbs $0.04

Available lbs Aroma Taste Optimal solution
500 75 86 0
600 85 88 0.6
400 60 75 0.4
>=75 >=80

c
0.45
AVAILABLE Used

500 0
600 600
0.4 400 400
75 80 82.8
60 75 75
0.4 1 1
 Ingridients Cost / oz ($) Optimal solution
a 0.1 4
b 0.03 4
c 0.09 2

Min cost (oz)

0.10a + 0.03b + 0.09c 0.7 $0.70

Constraints
a >= b
c >= 0.5a
a + b + c >= 10
a + b + c <= 15
a,b,c >= 0

Ingridients in 1 GALLON a b c

Minimum cost 0.1 0.03 0.09

Constraints
a >= b 4 4
c >= 0.5a 0.5 2
a + b + c >= 10 4 4 2
a + b + c <= 15 4 4 2
AVAILABLE Used

4 4
2 2
10 10
15 10
Microsoft Excel 16.65 Sensitivity Report
Worksheet: [Swarnima- HW-3.xlsx]Q. 7
Report Created: 25/09/22 8:00:28 PM

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$8 X 1484.966554 0 1 1E+030 1
$C$8 Y1 232.39355915 0 0 0.0213150034 0.019730204
$D$8 Y2 720.3878167 0 0 0.0196297936 0.8587999044
$E$8 Z1 329.40353242 0 0 0.6543018352 0.0198036851
$F$8 Z2 180.18611457 0 0 1.2834382152 0.0202639604
$G$8 Z3 0 0.020765905 0 1E+030 0.020765905
$H$8 Z4 0 0.0194197245 0 1E+030 0.0194197245
$I$8 Z5 442.30769231 0 0 1E+030 0.8169321326
$J$8 Z6 0 0.7855116659 0 1E+030 0.7855116659

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$K$9 Year 1 LHS 190 1 190 1E+030 1484.966554
$K$10 Year 2 LHS 215 0.9615384615 215 1E+030 342.57967372
$K$11 Year 3 LHS 240 0.924556213 240 1E+030 187.39355915
$K$12 Year 4 LHS 285 0.8690291424 285 2762.0330702 248.08012439
$K$13 Year 5 LHS 315 0.8169321326 315 3824.2368856 757.30769231
$K$14 Year 6 LHS 460 0.7855116659 460 3977.2063611 460
Let's assume
The min function to be X
Secutiy 1 to be Y1
Securiy 2 to be Y2
Zi = 1,2,3… to be invested savings from year i MIN

X Y1 Y2 Z1 Z2
1484.9665540294 232.393559 720.387817 329.403532 180.186115
Year 1 1 -1.055 -1 -1 0
Year 2 0 0.0675 0.05125 1.04 -1
Year 3 0 0.0675 0.05125 0 1.04
Year 4 0 1.0675 0.05125 0 0
Year 5 0 0 1.05125 0 0
Year 6 0 0 0 0 0
coef 1 0 0 0 0
OBJECTIVE 1
Annual payment
Year 1 X - 1.055Y1 - Y2 - Z1 190
Year 2 X - 0.0675Y1 - 0.05125Y2 - 1.04Z1 - Z2 215
Year 3 X - 0.0675Y1 - 0.05125Y2 - 1.04Z2 - Z3 240
Year 4 X - 1.0675Y1 - 0.05125Y2 - 1.04Z3 - Z4 285
Year 5 X - 1.05125Y2 - 1.04Z4 - Z5 315
Year 6 X- 1.04Z5 - Z6 460

Minimum cash necessary $1,484,967

b. If shadow price for the annual payment in year 6 is 0.78551, so we have 60000

c. The shadow price for the annual payment for first year is 1, means each $1 reduction in the payment requ
beginning of first year will reduce the amount of money that the company must pay, Therefore the company is
anything less than $40,000
 1484.96655

Z3 Z4 Z5 Z6 LHS SIGN
0 0 442.307692 0
0 0 0 0 190 =
0 0 0 0 215 =
-1 0 0 0 240 =
1.04 -1 0 0 285 =
0 1.04 -1 0 315 =
0 0 1.04 -1 460 =
0 0 0 0 1484.96655

X $1,484,967
Y1 $232,394
Y2 $720,388
Z1 $329,404
Z2 $180,186
Z3 $0
Z4 $0
Z5 $442,308
Z6 $0

* 0.78551 47130.6

$1 reduction in the payment required at the

ust pay, Therefore the company is willing to pay
RHS

190
215
240
285
315
460
d.

X Y1 Y2 Z1 Z2 Z3
1417.73857 178.553579 963.786419 265.578127 147.647672 0
Year 1 1 -1.055 -1 -1 0 0
Year 2 0 0.0675 0.05125 1.04 -1 0
Year 3 0 0.0675 0.05125 0 1.04 -1
Year 4 0 1.0675 0.05125 0 0 1.04
Year 5 0 0 1.05125 0 0 0
Year 6 0 0 0 0 0 0
Year 7 0 0 0 0 0 0
coef 1 0 0 0 0 0

So, the company will save 1484.96655 - 1417.73857 67.2279816

 Z4 Z5 Z6 Z7 LHS RHS
0 728.180473 442.307692 0
0 0 0 0 5.68434E-14 0
0 0 0 0 190 190
0 0 0 0 215 215
-1 0 0 0 240 240
1.04 -1 0 0 285 285
0 1.04 -1 0 315 315
0 0 1.04 -1 460 460
0 0 0 0 1417.73857