Reference no: EM132947500

SuperCity is a large retailer of electronics and appliances. The store sells three different models of TVs that are ordered from different manufacturers. The demands, costs, and storage requirements for each model are summarized in the following table:

Model 1
Model 2
Model 3
Annual Demand
800
500
1,500
Unit Cost
$300
$1,100
$600
Storage space req'd
9 sq ft
25 sq ft
16 sq ft

It costs $60 to do the administrative work associated with preparing, processing, and receiving orders, and SuperCity assumes a 25% annual carrying cost for all items it holds in inventory. There are 3,000 square feet of total warehouse space available for storing these items, and the store never wants to have more than $45,000 invested in inventory for these items. The manager of this store wants to determine the optimal order quantity for each model of TV.

1. Formulate an NLP model for this problem.
2. Implement your model in a spreadsheet and solve it.
3. What are the optimal order quantities?
4. How many orders of each type of TV will be placed each year?
5. Assuming demand is constant throughout the year, how often should orders be placed?