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Space Constrained Inventories

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A grocer has exactly 1,000 square feet available to display and sells 3 kinds of vegetables. The space consumed by each kind of vegetable is proportional to its cost, and tomatoes consume 0.5 square feet per pound. There is a $100 setup cost for replenishing any of the vegetables, and the interest rate is 25% per annum. The 3 vegetables for sale have the following data:

Tomatoes: annual demand is 850 pounds and the cost per pound is $0.29.
Lettuce: annual demand is 1280 pounds and the cost per pound is $0.45.
Zucchini: annual demand is 630 pounds and the cost per pound is $0.25.

What is the optimal quantity for purchasing each vegetable?

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Solution Summary

Solution depicts the steps to calculate optimal for purchasing each of the given vegetables.

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Theory of Constraints: Managing Bookstore More Efficiently

We have a university bookstore that controls the majority of local market share for used and new textbooks. The bookstore primary constrains are floor and shelf space for fast selling items such as textbooks and market share for slow-selling items such as general merchandise.

How can they manage the store more efficiently? How can bookstore constrains be both floor space (internal) and market share (external)?

** Please see spreadsheet attached. **

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