The range of outcomes possible for each variable are determined by constraints within the optimisation problem. Each variable will be subject to at least one of the following type of constraints:
- Default lower and upper bounds;
- Constraints determined by legislative limits (e.g. superannuation caps, Transfer Balance caps etc.);
- Minimum requirements (e.g. minimum investment balance required for Managed Investments etc.);
- Custom zone in constraints (these statements are typically used to remove statement that would otherwise cause the solution to become non-linear;
- Constraints attached to each risk profile.
The default lower and upper bound constraints are as follows:
| Bound | Default setting |
|---|---|
| Lower | 0 |
| Upper | 100,000,000 |
An arbitrary big number of 100,000,000 is set as the upper bound limit. This stops the optimisation problem from exploring options outside the realm of what is realistic, which improves solve time. This number is often reduced further when it is observed that it is not possible for a variable to reach this size.
When solving an optimisation problem, an adviser can observe all variables and the constraints that are attached to each variable.
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