Submission guideline: This sheet (Please make a conclusion statement as guided) and a spreadsheet with all your work.

Investment Advisors, Inc. is a brokerage firm that manages stock portfolios for a number of clients. A particular portfolio consists shares of U.S. Oil and shares of Huber Steel. The annual return for U.S. Oil is $5 per share and the annual return for Huber Steel is $7 per share. U.S. Oil sells for $56 per share and Huber Steel sells for $85 per share. The portfolio has $90,000 to be invested. The portfolio risk index (0.50 per share of U.S. Oil and 0.35 per share for Huber Steel) has a maximum of 2060. In addition, the portfolio is limited to have at least 660 shares of Huber Steel.

Please formulate a linear Programming model to determine the investment portfolio in order to maximize the total annual return.

Step 1: Describe the objective (Verbally).

Step 2: Describe each constraint (Verbally).

Step 3: Define the decision variables.

Step 4: Write the objective in terms of the decision variables.

Step 5: Write the constraints in terms of the decision variables.

2. Please make an LP model based on your step 4 and step5. (Follow the format used in Chapter 2 Example 1)

Please refer to your spreadsheet to verbally state the optimal solution (round to a whole number) and the maximized profits.