The Pelletier Corporation has just discovered that it will not have enough warehouse space for the...

 

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The Pelletier Corporation has just discovered that it will not have enough warehouse space for the next 5 months. The additional warehouse space requirements for this period are listed in the following table: Month 2 3 4 Additional Space Needed (in 1,000 sq ft) 25 10 20 10 5. To cover its space requirements, the firm plans to lease additional warehouse space on a short-term basis. Over the next 5 months, a local warehouse has agreed to lease Pelletier any amount of space for any number of months according to the following cost schedule. Length of Lease (in montha) 2. 4 Cost per 1,000 square feet $300 $525 $775 $850 $975 This schedule of leasing options is available to Pelletier at the beginning of each of the next 5 months. For example, the company could elect to lease 5,000 square feet for 4 months beginning in month 1 (at a cost of 850 x 5) and lease 10,000 square feet for 2 months beginning in month 3 (at a cost of 525 x 10). Use Solver to create a Sensitivity Report for above question and answer the following questions: a. Is the solution degenerate? Yes b. Is the solution unique? Can't tell c. Use a Solver Plot to determine the maximum price the Pelletier Corporation should be willing to pay for a two-month lease. d. Suppose the company is not certain that it will need exactly 20,000 sq. ft. in month 3 and believes that actual amount needed may be as low as 15,000 sq ft or as high as 25,000 sq. ft. Use a Solver Table to determine if this would have any impact on the leasing arrangements the company selects in months 1 and 2. The input in the box below will not be graded, but may be reviewed and considered by your instructor. blank Hide Feedback The Pelletier Corporation has just discovered that it will not have enough warehouse space for the next 5 months. The additional warehouse space requirements for this period are listed in the following table: Month 2 3 4 Additional Space Needed (in 1,000 sq ft) 25 10 20 10 5. To cover its space requirements, the firm plans to lease additional warehouse space on a short-term basis. Over the next 5 months, a local warehouse has agreed to lease Pelletier any amount of space for any number of months according to the following cost schedule. Length of Lease (in montha) 2. 4 Cost per 1,000 square feet $300 $525 $775 $850 $975 This schedule of leasing options is available to Pelletier at the beginning of each of the next 5 months. For example, the company could elect to lease 5,000 square feet for 4 months beginning in month 1 (at a cost of 850 x 5) and lease 10,000 square feet for 2 months beginning in month 3 (at a cost of 525 x 10). Use Solver to create a Sensitivity Report for above question and answer the following questions: a. Is the solution degenerate? Yes b. Is the solution unique? Can't tell c. Use a Solver Plot to determine the maximum price the Pelletier Corporation should be willing to pay for a two-month lease. d. Suppose the company is not certain that it will need exactly 20,000 sq. ft. in month 3 and believes that actual amount needed may be as low as 15,000 sq ft or as high as 25,000 sq. ft. Use a Solver Table to determine if this would have any impact on the leasing arrangements the company selects in months 1 and 2. The input in the box below will not be graded, but may be reviewed and considered by your instructor. blank Hide Feedback

Answer rating: 100% (QA)

a Yes b Cant Te... View the full answer