Formulatimng the linear programming model


George recently inhereted a large sum of money. He wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: 1 a bond fund and 2 a stock fund. The projected returns over the life of the investments are 6% for the bond fund and 10% for the stock fund. Whatever portion of the inheritance he finally decided to commit to the trust fund, he wants to invest at at least 30% of that amount in the bond fund. Also he wants to select a mixture with a total return of at least 7.5%. Formulate a linear programming model that can be used to determine the percentage that should be allocated to each investment idea.

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