Question: A company will begin stocking remote control devices. Expected monthly demand is 800 units. The controllers can be purchased from either supplier A or supplier
- A company will begin stocking remote control devices. Expected monthly demand is 800 units. The controllers can be purchased from either supplier A or supplier B. Their price lists are as follows:
| Supplier A | |
| Quantity | Unit Price* |
| 1 - 199 | $14.00 |
| 200 499 | $13.80 |
| 500 - 1000 | $13.60 |
| Supplier B | |
| Quantity | Unit Price* |
| 1 - 149 | $14.10 |
| 150 - 349 | $13.90 |
| 350 - 600 | $13.70 |
The fixed ordering cost for Supplier A is $400 and has a capacity to supply up to 1000 units per month. The fixed ordering cost for Supplier B is $300 an has a capacity to supply up to 600 units.
The objective is to minimize the total cost of purchasing (fixed plus variable costs).
- Formulate this problem as a linear integer programming problem and find an optimal solution using Excel solver. (Assume an all-units discount offering from the suppliers)
- Formulate this problem as a linear integer programming problem and find an optimal solution using Excel solver. (Assume a graduated discount offering from the suppliers)
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