File Name: Optimization – Investment Portfolio Allocation
Location: Modeling Toolkit | Optimization | Investment Portfolio Allocation
Brief Description: Illustrates how to run an optimization on investment decision variables in project allocation and new product mix
Requirements: Modeling Toolkit, Risk Simulator
This model looks at a set of new product lines that a company is thinking of investing in and the respective decisions on amounts to be invested to maximize profits (Figure 97.1). Each proposed new product line has its own estimated operating net returns and allowed investment range (lower and upper bounds). The idea is to maximize the total expected returns on the portfolio of investments subject to some budget constraint.
Figure 97.1: Investment allocation model
