Microsoft Excel 15.

30 Answer Report
Worksheet: [LinProg.xlsx]Manufacturing Max
Report Created: 1/16/18 1:55:20 PM
Result: Solver found a solution. All constraints and optimality conditions are satisfied.
Solver Engine
Engine: Simplex LP
Solution Time: 1.248402 Seconds.
Iterations: 3 Subproblems: 0
Solver Options
Max Time Unlimited, Iterations Unlimited, Precision 0.000001, Use Automatic Scaling
Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative

Objective Cell (Max)

Cell Name Original Value Final Value
$C$27 Total Contribution Margin Formul $95.00 $10,400.00

Variable Cells
Cell Name Original Value Final Value Integer
$F$15 laptop 1 # Units Produced &Sold 1 120 Contin
$F$16 laptop 2 # Units Produced &Sold 1 100 Contin

Constraints
Cell Name Cell Value Formula Status Slack
$C$32 Total Units for x Formula 120 $C$32<=$E$32Not Binding 80
$C$33 Total Units for y Formula 100 $C$33>=$E$33Binding 0
$C$34 Total COGS Formula $70,000.00 $C$34<=$E$34Binding 0
Microsoft Excel 15.30 Sensitivity Report
Worksheet: [LinProg.xlsx]Manufacturing Max
Report Created: 1/16/18 1:55:21 PM

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$F$15 laptop 1 # Units Produced &Sol 120 0 45 1E+030 13.75
$F$16 laptop 2 # Units Produced &Sol 100 0 50 22 1E+030

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$C$32 Total Units for x Formula 120 0 200 1E+030 80
$C$33 Total Units for y Formula 100 -22 100 75 50
$C$34 Total COGS Formula $70,000.00 0.18 70000 20000 30000
Microsoft Excel 15.30 Limits Report
Worksheet: [LinProg.xlsx]Manufacturing Max
Report Created: 1/16/18 1:55:21 PM

Objective
Cell Name Value
$C$27 Total Contribution Margin Formul $10,400.00

Variable Lower Objective Upper Objective

Cell Name Value Limit Result Limit Result
$F$15 laptop 1 # Units Produced &Sold 120 0 $85.00 250 $18,835.00
$F$16 laptop 2 # Units Produced &Sold 100 0 $110.00 398.5 $20,035.00
A computer company plans to sell two versions of a laptop (Laptop 1 and Laptop 2)
at a price of $295.00 and $450.00 with a cost (COGS) of $250.00 and $400.00.
Max Monthly Demand for Laptop 1 is 200 units.
Min Monthly Demand for Laptop 2 is 100 units.
Total COGS should not exceed ₱70,000.00.
What number of units produced and sold will maximize Contribution Margin?
(Contribution Margin = CM = Amount that can cover all none assigned costs and profit).
List Goal (Objective) , Variables (including Decision Variables), Objective function (formula to maximize) and constraints.
Solve on paper with Linear Algebra, then in Excel using Solver.

Formula Inputs Variables and Facts:

Computer Company

Contribution
Price COGS Margin
$295.00 $250.00 $45.00
$450.00 $400.00 $50.00

Written Constraints:
Max Monthly Demand for laptop 1 200
Min Monthly Demand for laptop 2 100
Max COGS for project $70,000.00

Goal (Objective):
Calculate the number of units for Laptop 1 and Laptop 2 which will maximize CM.

Objective Function: Formula

Total Contribution
Total Contribution Margin = TCM = ₱45*x + ₱50*y Margin $10,400.00

Math Constraints: Formula

x>= 0 non-negativity requirement
y>= 0 non-negativity requirement
x <= 200 Total Units for x 120
y >= 100 Total Units for y 100
₱250*x + ₱400*y <= ₱70,000 Total COGS $70,000.00
y <= -2.5x+175
=F15
=F16
=SUMPRODUCT(B15:B16,F15:F16)
formula to maximize) and constraints.

# Units
Decision Variable = Produced
# Units Produced and Sold Product &Sold
x laptop 1 120 =A15-B15
y laptop 2 100 =A16-B16

Goal:

Maximize =SUMPRODUCT(C15:C16,F15:F16)

Operator Constraint Slack

200 80
100 0
$70,000.00 $0.00

=E32-C32
=E33-C33
MPRODUCT(B15:B16,F15:F16) =E34-C34
Total Contribution Margin
Gel Boomerangs: Manufacturer try to decide between 4 Projects and has limited resources over next four years
Binary Example When There Is Limited Capital
Binary Variable is like on on/off switch.

New CC Router New Paint Room

Type of Project: Machine New Delivery Van Research Project Equipment
Year Cash Flow Cash Flow Cash Flow Cash Flow
0 -$254,000 -$50,000 -$3,500 -$90,150
1 $135,000 $49,500 $15,000 $125,000
2 $130,000 $22,500 $6,000 $19,000
3 $130,000 $59,500 $1,000 $17,500
4 $125,000 -$5,000 -$4,000 -$6,500
Discount Rate 0.175 0.15 0.22 0.175
Net Present Value $85,760 $40,278 $9,485 $31,806
Binary (1 or 0) Variable
TRUE = 1, FALSE = 0

Year Capital Req. Capital Req. Capital Req. Capital Req.

Year 1 $15,000 $10,000 $2,000 $15,000
Year 2 $10,000 $5,000 $2,000 $0
Year 3 $17,000 $5,000 $2,000 $0
Year 4 $19,000 $15,000 $1,000 $25,000
next four years

Total NPV Goal: Math Formula:

Maximize 85760*C + 40278*V + 9485*R + 31806*P

Capital
Total Operator Available Math Constraint:
<= $40,000 15000*C + 10000*V + 2000*R + 15000*P <= 40000
<= $50,000 10000*C + 5000*V + 2000*R + *P <= 50000
<= $40,000 17000*C + 5000*V + 2000*R + *P <= 40000
<= $35,000 19000*C + 15000*V + 1000*R + 25000*P <= 35000
Decision Variable: # Units Shipped
Orgin ( r) / Coeur
Destination (c ) Spokane Las Vegas d'Alene Rapid City
Oakland X11 X12 X13 X14
Portland X21 X22 X23 X24
Seattle X31 X32 X33 X34

Decision Variable: # Units Shipped

Orgin ( r) / Coeur
Destination (c ) Spokane Las Vegas d'Alene Rapid City Totals
Oakland 1000 4000 0 0 5000 <=
Portland 2500 0 2000 1500 6000 <=
Seattle 2500 0 0 0 2500 <=
Totals 6000 4000 2000 1500 13500
= = = =
Demand Constraint 6,000 4,000 2,000 1,500 Objective Function:
39500
Coeur
Cost per Unit Spokane Las Vegas d'Alene Rapid City
Oakland 3 2 7 6
Portland 6 5 2 3
Seattle 2 5 4 5

Alternative Solutions:
New Max Objective Function = Sum of Decision Variables that are equal to zero.

New Constraint:
Constraint
Function Operator Limit
 Supply Constraint
5,000
6,000
2,500

Objective Function:
Goal: Minimize Costs
Microsoft Excel 15.30 Answer Report
Worksheet: [LinProg.xlsx]Finance Max
Report Created: 1/16/18 1:29:16 PM
Result: Solver found a solution. All constraints and optimality conditions are satisfied.
Solver Engine
Engine: Simplex LP
Solution Time: 1.690985 Seconds.
Iterations: 6 Subproblems: 0
Solver Options
Max Time Unlimited, Iterations Unlimited, Precision 0.000001
Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNegative

Objective Cell (Max)

Cell Name Original Value Final Value
$C$31 = x1 * 0.065 + x2 * 0.115 + x3 * 0.059 + x4 * 0.085 + x5 * 0.055 For $379.00 $23,860.00

Variable Cells
Cell Name Original Value Final Value
$E$16 MSFT Amount Invested $1,000.00 $0.00
$E$17 AAPL Amount Invested $1,000.00 $125,000.00
$E$18 TGT Amount Invested $1,000.00 $15,000.00
$E$19 AMZN Amount Invested $1,000.00 $85,000.00
$E$20 E*Trade Corp Bond Fund Amount Invested $1,000.00 $25,000.00

Constraints
Cell Name Cell Value Formula
$C$33 Total Invested Formula $250,000.00 $C$33<=$E$33
$C$34 Total Invested in Tech Sector Formula $125,000.00 $C$34<=$E$34
$C$35 Total Invested in Retail Sector Formula $100,000.00 $C$35>=$E$35
$C$36 Total Invested in TGT Formula $15,000.00 $C$36>=$E$36
$C$37 Total Invested in Corporate Bonds Index Fund Formula $25,000.00 $C$37>=$E$37
 Integer
Contin
Contin
Contin
Contin
Contin

Status Slack
Binding 0
Binding 0
Not Binding $25,000.00
Binding $0.00
Binding $0.00
Microsoft Excel 15.30 Sensitivity Report
Worksheet: [LinProg.xlsx]Finance Max
Report Created: 1/16/18 1:29:17 PM

Variable Cells
Final Reduced Objective Allowable
Cell Name Value Cost Coefficient Increase
$E$16 MSFT Amount Invested 0 -0.05 0.065 0.05
$E$17 AAPL Amount Invested 125000 0 0.115 1E+030
$E$18 TGT Amount Invested 15000 0 0.059 0.026
$E$19 AMZN Amount Invested 85000 0 0.085 0.03
$E$20 E*Trade Corp Bond Fund Amount Invested 25000 0 0.055 0.03

Constraints
Final Shadow Constraint Allowable
Cell Name Value Price R.H. Side Increase
$C$33 Total Invested Formula $250,000.00 0.085 250000 1E+030
$C$34 Total Invested in Tech Sector Formula $125,000.00 0.03 125000 25000
$C$35 Total Invested in Retail Sector Formula $100,000.00 0 75000 25000
$C$36 Total Invested in TGT Formula $15,000.00 -0.026 15000 85000
$C$37 Total Invested in Corporate Bonds Index Fund Form $25,000.00 -0.03 25000 25000
Allowable
Decrease
1E+030
0.03
1E+030
0.026
1E+030

Allowable
Decrease
25000
125000
1E+030
15000
25000
Microsoft Excel 15.30 Limits Report
Worksheet: [LinProg.xlsx]Finance Max
Report Created: 1/16/18 1:29:17 PM

Objective
Cell Name Value
$C$31 = x1 * 0.065 + x2 * 0.115 + x3 * 0.059 + x4 * 0.085 + x5 * 0.055 For $23,860.00

Variable Lower Objective

Cell Name Value Limit Result
$E$16 MSFT Amount Invested $0.00 $0.00 $85.00
$E$17 AAPL Amount Invested ### $0.00 $110.00
$E$18 TGT Amount Invested $15,000.00 $0.00 $125.00
$E$19 AMZN Amount Invested $85,000.00
$E$20 E*Trade Corp Bond Fund Amount Invested $25,000.00
 Upper Objective
Limit Result
$250.00 $18,835.00
$398.50 $20,035.00
$597.00 $21,020.00
The maximum available funds for a portfolio of investments are $250,000.
The three investment categories for this portfolio are: Tech Sector, Retail Sector and Corporate Bonds Index Fund.
The individual investments being considered are MSFT, AAPL, TGT, AMZN, E*Trade Corp Bond Fund.
The expected returns on the investments are as follows: MSFT = 6.50%, AAPL = 11.50%, TGT = 5.90%, AMZN = 8.50%, E*Tr
The maximum amount to invest in the Tech Sector is $125,000.
The minimum amount to invest in the Retail Sector is $75,000.
The minimum amount to invest in the the individual stock TGT is $15,000.
The minimum amount to invest in Corporate Bonds Index Fund is 20% of the amount invested in the Tech Sector.
What is the amount should be invested in each investment so that profits are maximized?

Goal:
Maximize: Returns for Portfolio

List Variables and Facts:

Amount Invested Amount Invested
Decision Variable x1
Decision Variable x2
Decision Variable x3
Decision Variable x4
Decision Variable x5

Constraints:
Available Funds $250,000.00
Max amount to invest in Tech Sector = $125,000.00
Min amount to invest in Retail Sector = $75,000.00
Min amount to invest in TGT = $15,000.00
Min amount to invest in Corporate Bonds Index
Fund = 0.2* Amount Invested in Tech Sector 0.2
Each Amount must be non-negative 0

Objective Function:
= x1 * 0.065 + x2 * 0.115 + x3 * 0.059 + x4 * 0.085 + x5 * 0.055
Constraints:
x1 + x2 + x3 + x4 + x5 <= $250,000.00 Total Invested
x1 + x2 <= $125,000.00 Total Invested in Tech Sector
x3 + x4 >= $75,000.00 Total Invested in Retail Sector
x3 >= $15,000.00 Total Invested in TGT
x5 >= (x1 + x2)*0.2 Total Invested in Corporate Bonds Index Fund
onds Index Fund.

90%, AMZN = 8.50%, E*Trade Corp Bond Fund = 5.50%.

the Tech Sector.

Investment Expected Returns Amount Invested

MSFT 0.065 $0.00 Tech Sector
AAPL 0.115 $125,000.00
TGT 0.059 $15,000.00 Retail Sector
AMZN 0.085 $85,000.00
E*Trade Corp Bond Fund 0.055 $25,000.00 Corporate Bonds Index Fund

Formula Goal:
$23,860.00 Maximize
Formula Operator Constraint Slack
$250,000.00 <= $250,000.00 $0.00
$125,000.00 <= $125,000.00 $0.00
$100,000.00 >= $75,000.00 -$25,000.00
$15,000.00 >= $15,000.00 $0.00
$25,000.00 >= $25,000.00 $0.00

0.2* Amount
Invested in Tech
Sector
Decision Variable: # Units Shipped
Origin (r) / Destination Coeur
(c) Spokane Las Vegas d’Alene Rapid City
Oakland X11 X12 X13 X14
Portland X21 X22 X23 X24
Seattle X31 X32 X33 X34

Decision Variable: # Units Shipped

Origin (r) / Destination Coeur
(c) Spokane Las Vegas d’Alene Rapid City Total
Oakland 5075 0 0 0 5075
Portland 1075 4125 950 0 6150
Seattle 0 0 1100 1625 2725
Total 6150 4125 2050 1625 13950
Total Costs
Demand 6150 4125 2050 1625 13950
Goal: Min/Max
Coeur
Shipping Cost per Unit Spokane Las Vegas d’Alene Rapid City
Oakland 3.5 2.5 6.75 7
Portland 6 5.5 2.25 3.25
Seattle 2.5 5 3.75 5.25
Supply Constraints
5075
6150
2725
13950
Objective Function