What is the optimal buying or selling strategy

Reference no: EM132218603

Question - A certain dealer owns a warehouse that can store a maximum of 600 units of a given commodity. He has on hand 100 units of the commodity and knows the buying and selling price for the next 5 time periods. They are:

PERIOD	BUYING PRICE	SELLING PRICE
1	15	16
2	17	17
3	21	20
4	19	19
5	16	20

He is permitted to sell up to the amount that he has in his warehouse at the beginning of each period. If he buys in a given period, delivery will be made so that it is in storage at the beginning of the next period. Let (Xi, Yi) denote the amount he buys and sells in time-period i respectively. What is the optimal buying\selling strategy.

Formulate the linear programming problem. Develop a spreadsheet and solve the problem.

Reference no: EM132218603

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