Optimal Portfolio Mix for Multigrow Insurance Company in Ghana Using Linear Programming

Abstract

In this paper, the concept of Linear Programming (LP) was applied to Multigrow Insurance Company in Ghana which had a portfolio problem. The company had obtained GH₵ 200000 cash but had a difficulty in determining how much to invest in each of five investment areas in order to maximize return. Based on the data collected, the problem was formulated as a Linear Programming Problem and solved using Management Scientist Version 5 Software. Optimal portfolio mix was obtained for the Insurance Company. Finally, the total optimal return on the investments of the company was found to be GH₵ 15980. It is strongly recommended that the Company should adhere to the proposed optimal portfolio mix and also employ at least one operations researcher to assist the Company in its activities.

Keywords: Investment, Linear Programming, Optimal Portfolio Mix, Optimal Return., Portfolio

Article Review Status: Published

Pages: 11-17 (Download PDF)

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