1. ## Linear Programming Help

I can't seem to get the model correct for this problem.

A portion of an inheritance will be used to set up a trust fund for two children. The two fund opportunities are: (1) a bond fund with a projected return of 6%, (2) a stock fund with a projected return of 10%. Whatever is decided what portion will be committed to the trust fund, at least 30% of that amount will be invested in the bond fund. In addition, a mix will be selected that will enable a total return of at least 7.5%.

a. Formulate a linear programming model to determine the percentage that should be allocated to each of the possible alternatives.
b. Solve using the graphical solution procedure.

2. Where are you hung up?

Write down some definitions. <== Note: This is ALWAYS a great place to start.

B is the proportion in the Bond Fund
S is the proportion in the Stock Fund
B+S = 1, of course.
B >= 0
S >= 0

Write down the requirements and have at it.

"at least 30% of that amount will be invested in the bond fund"
B/(B+S) >= 0.30 or B >= (B+S)*0.30

"a mix will be selected that will enable a total return of at least 7.5%"
B*0.06 + S*0.10 >= (B+S)*0.075

After a little algebra, you'll be ready to start drawing pictures. Let's see what you get.