Solve This Linear Programming Mixture Problem: Kim and Lynn Produce

question 56

Essay

Solve this linear programming mixture problem: Kim and Lynn produce pottery vases and bowls. A vase requires 25 oz of clay and 5 oz of glaze. A bowl requires 20 oz of clay and 10 oz of glaze. There are 500 oz of clay available and 160 oz of glaze available. The profit on one vase is $5 and the profit on one bowl is $3. How should Kim and Lynn schedule production to optimize profit?

---

Definitions:

Reinvestment Risk

The risk of earning less interest or dividends from future investments when existing bonds, stocks, or other income-generating assets mature or are sold.

Macaulay Duration

A measure of the weighted average time until a bond's cash flows are repaid, used in assessing interest rate risk.

Future Value

The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today, taking into account various factors like interest or returns.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.