Sample Solution: Linear optimization: Inventory Management
Sales per year 10,400 cd's
Mfg/Purchasing Costs
She buys from supplier >= 1000 at $4.45 ea CD
She buys from supplier <=1000 at $4.50 ea CD
Delivery Charge from her supplier is $10/shipment regardless of size
She pays Finance Rate annual interest rate 15%
She pays NYS Property Tax 5% on Annual Inv Value
She pays Insurance Charges 0.02 for every dollar of inventory
She Buys from her supplier 200 CD's/Week
How much does inv management cost her?
Best small order inventory plan?
how big are her orders?
how much does it cost her?
How much does she save?
https://brainmass.com/math/optimization/sample-solution-linear-optimization-inventory-management-590717
Solution Preview
Sales per year 10,400
Quantity Price per unit
Less than 1,000 $4.45
More than 1,000 $4.50
Delivery charge per shipment $10
Finance rate 15%
Property tax 5% of invetory value
Insurance charges 0.02 for every dollar of inventory
Order size 200
Number of orders per year ...
Solution Summary
A sample solution to an inventory management problem. Linear optimization and inventory management is examined.