Jackson LEI Hou Ieong

S075382

HE4
Assignment 4

1. Let Bond1 be X1, Bond2 be X2, Bond3 be X3, Bond4 be X4

Maximum profits: X1 x 1.13 + X2 x 1.08 + X3 x 1.12 + X4 x 1.14

Constraints:
X1+X2+X3+X4 = 1 000 000
X1, X2, X3, X4 => 0
(X1 x 3 + X2 x 4+ X3 x 7 + X4 x 9)/ 1 000 000 <= 6
X1, X2, X3, X4 <= 400 000
X1 x 0.06 + X2 x 0.08 + X3 x 0.1 + X4 x 0.09 => 1 000 000 x 0.08

2. For this equation, we need to solve the Z first as it is an iso-profit line or corner
point method.

1) x + y + z = 3
z = 3 - x - y ---- (2)
Put (2) in the equation of max profit:
3x + 2y + 3 - x - y
= 2x + y + 3 ---- new max. profit

Now, we only get the two unknowns for the questions

Solving the max profit by potting the graphic and use the Corner Point Solution Method:

From the equation: x + 2y <=4

When x = 0, y = 2;
y = 0, x = 4

From the equation: 2x + 3y <=7

When x = 0, y = 7/3;
y = 0, x = 7/2
Then, we can draw two lines on the graphic and get 4 corner points.
Jackson LEI Hou Ieong

S075382

HE4

Point 1: x = 0, y = 2; Max profit = 2 x 0 + 2 + 3=5

Point 2: x = 2, y = 1; Max profit = 2 x 2 + 1 + 3=8
Point 3: x = 7/2, y = 0; Max profit = 2 x 7/2 + 0 + 3= 10
Point 4: x = 0, y = 0; Max profit = 2 x 0 + 0 + 3=3

The max profit is on point 3 (7/2, 0) and the max profit is 10

3. The distances will be |W-B|+|W-A|+|W-C|

But, it cannot be showed in absolute value, so it can be divided into two possible factors
for each.

|W-B|= W-B, when W => B =>0 or B - W, when B => W

|W-A|= W-A, when W => A =>0 or A - W, when A => W
|W-C|= W-C, when W => C =>0 or C - W, when C => W

From these factors, then we can get 8 possible constraints

1. 3W - A - B – C >= 0
2. -3W + A + B + C >= 0
3. W - A + B + C >= 0
4. – W + A + B + C >= 0
5. W + A - B - C >= 0
6. – W - A + B + C >= 0
7. – W + A + B + C >= 0
8. W - A - B - C >= 0