MATHEMATICAL APPLICATION OF REVISED SIMPLEX MODELLING IN OPTIMAL LOAN PORTFOLIO

Authors

  • Prince Kusi Berekum College of Education Mathematics and ICT Department
  • Andrews Ohene Darteh Berekum College of Education; College Administration
  • Emmanuel Teku Berekum College of Education Mathematics and ICT Department
  • Samuel Acheampong Berekum College of Education Mathematics and ICT Department

Keywords:

Application, Linear Programming (LP), Portfolio, Optimal

Abstract

Purpose: The main aim of this study is to develop Linear Programming (LP) model to help ADB, Sunyani branch in the Brong Ahafo Region to allocate their funds to prospective loan seekers in order to maximize profits.

Methodology: To achieve this aim, a secondary data were extracted from the annual reports and financial statements of the bank. Based on these empirical data, LP model was formulated. A computerized software application called LP Solver based on Revised Simplex Algorithm was used to solve the problem.

Results: The results from the model showed that ADB, Sunyani branch would be making annual profit of GH¢ 476732.00 on loans alone as against GH¢ 190693.00 in 2011 if they stick to the model.

Unique contribution to Theory, Practice and Policy: From the study, it was realized that the Scientific method used to develop the proposed model can have a significant increase in the Bank's profit margin if put into use.

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Author Biographies

Prince Kusi, Berekum College of Education Mathematics and ICT Department

Student

Andrews Ohene Darteh, Berekum College of Education; College Administration

Lecturer

Emmanuel Teku, Berekum College of Education Mathematics and ICT Department

Lecturer

Samuel Acheampong, Berekum College of Education Mathematics and ICT Department

Lecturer

References

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Published

2019-09-05

How to Cite

Kusi, P., Darteh, A. O., Teku, E., & Acheampong, S. (2019). MATHEMATICAL APPLICATION OF REVISED SIMPLEX MODELLING IN OPTIMAL LOAN PORTFOLIO. Journal of Statistics and Actuarial Research, 2(1), 50 – 67. Retrieved from https://iprjb.org/journals/index.php/JSAR/article/view/964

Issue

Vol. 2 No. 1 (2019)

Section

Articles

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Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.