In: Operations Management
Bank provides 5 different loans. The types of these loans and monthly interest rates are given below.
Type Of Credit Percentage Of Interest(month)
A (commercial) 5.5
B)(home) 3.5
C (auto) 5
D (House 2) 4.5
E (short term)) 6
The bank can give credit £ 100 million. The goal is to maximize interest income
But have some obligations about the loans:
Credit C cannot be more than 25% of credit B.
Credit A can be given up to a maximum of credit D.
The bank must give at least 50% of its loans from types B and D.
Credit B must be at least 1.5 times that of credit D.
The type E Loan cannot exceed 10 million £.
Create a mathematical programming model that will find the optimal credit distribution plan of the bank. Prepare this model in Excel and obtain the optimal plan.
Let us consider
A be the Commercial lone
B is the home loan
C is the auto loan
D is the house 2 loan
E is the short term loan
Given The bank can give credit £ 100 million.
A+B+C+D+E=£ 100 million.
Credit C cannot be more than 25% of credit B.
C<=0.25B
Credit A can be given up to a maximum of credit D.
A<=D
The bank must give at least 50% of its loans from types B and D
B+D>= 50% Of £ 100 million.
B+D =£ 50 million.
Credit B must be at least 1.5 times that of credit D.
B.>=1.5 D
The type E Loan cannot exceed 10 million £.
E<=£ 10 million.
Here the Optimum credit distribution for Profit maximization is to give loan for HOME (B) that 100% amount, The Profit obtained will be 3.5 million euros.