A local outdoor vegetable stand has exactly 1 2 0 0 square feet of space to display
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Question:
A local outdoor vegetable stand has exactly square feet of space to display vegetables:
tomatoes, lettuce, and zucchini. The appropriate data for these items is given in the following table.
Tomatoes Lettuce Zucchini
Annual Demand in lb
Cost per lb $ $ $
Space requirement in ftlb
The setup cost for replenishment of the vegetables is $ for each type of vegetable. The annual interest
rate used for computing holding costs is percent.
a Find the individual EOQs for each vegetable without regard to the display space constraint.
b What is the total display space required by the EOQ amounts in part a
c Now consider the display space constraint; what are the optimal quantities that should be
purchased of these three vegetables?
d What is the maximum amount in $ft this vegetable vendor should be willing to pay for
additional display space?
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