1. formulate a LP model for this problem

2. fill in enclosed spreadsheet using Solver

3. what is optimal solution?

4. how much would it cost the company if in each month it leases for one month exactly the amount of space needed for the month?

The Shop at Home Network sells various household goods during live television broadcasts. The company owns several warehouses to hold many of the goods it sells but also leases extra warehouse space when needed. During the next five months, the company expects it will need to lease the following amounts of extra warehouse space: Month Square Feet Needed 20,000 30,000 40,000 35,000 50,000 At the beginning of any month, the company can lease extra space for one or more months at the following costs: Lease term (months) 1 3 4 Cost per Sq. Ft. Leased $55 $95 $130 $155 $185 So, for instance, at the start of month 1 the company can lease as much space as it wants for four months at a cost of $155 per square foot. Similarly, at the start of month 3, the company can lease any amount of space for two months at a cost of $95 per square foot. The company wants to determine the least costly way of meeting its warehousing needs over the coming five months. A B D E F G H 1 1 Shop @ Home 2 3 4 5 Through month 3 1 2 4 5 Leased in month 1 2 3 4 5 6 7 8 9 10 11 12 Total Total Available Needed 20000 30000 40000 35000 50000 - - - $55 $95 $55 Leasing costs $130 $95 $55 13 14 15 16 17 18 $155 $130 $95 $55 $185 $155 $130 $95 $55 - Total leasing cost 19 20 21 22