1.

Portfolio Selection:
Decision variables
TB: $million invested in treasury bonds;
CS: $million invested in common stock;
MM: $million invested in money market funds;
MB: $million invested in municipal bonds.
Objective function
Max return ($million): 0.08TB+0.06CS+0.12MM+0.09MB
Constraints
Available funds: TB+CS+MM+MB < 10
TB and CS: TB + CS > 30%*10
MM and MB: MM+MB < 40%*10
TB max: TB <5
CS max: CS <7
MM max: MM <2
MB max: MB < 4
Nonnegativity: TB, CS, MM, MB > 0

2. Make-or-Buy Problem:
Decision variables
x11: lbs of chemical 1 produced in house
x12: lbs of chemical 1 purchased from outside
x21: lbs of chemical 2 produced in house
x22: lbs of chemical 2 purchased from outside
x31: lbs of chemical 3 produced in house
x32: lbs of chemical 3 purchased from outside
Objective function
Min cost (total cost of producing and purchasing the three chemicals)
Min 2.5x11+2.8x12+1.75x21+2.5x22+2.90x31+3.25x32
Constraints
Sales chemical 1: x11+x21 > 2000 (Note: = is fine for this constraint)
Sales chemical 2: x21+x22 > 3500 (Note: = is fine for this constraint)
Sales chemical 3: x31+x32 > 1800 (Note: = is fine for this constraint)
Reactor 1 time: 0.05x11+0.04x21+0.01x31 < 200
Reactor 2 time: 0.02x11+0.06x21+0.03x31 < 150
Nonegativity: xij > 0, i = 1, 2, 3, j = 1, 2