A hardware company is studying a plan to open a new distribution center in the southeast. The company plans to rent a warehouse and an adjacent office, and distribute its main products to local dealers. The company has decided to initially start with four of its main products: pressure washers, go-karts, generators, and water pumps. Management has set aside a monthly budget of $170,000 for purchasing. Other than the budget, the available space in the warehouse is another concern. The warehouse has 82 shelves and each shelf is 30 feet long and 5 feet wide.

Each pressure washer and each generator is stored on a 5-foot by 5-foot pallet, each go-kart is stored on an 8-foot by 5-foot pallet, and four cases of water pumps (with five water pumps in each case) are stored on a 5-foot by 5-foot pallet. Also, for promoting its brand products, the company has decided to allocate at least 30% of its inventory to pressure washers and go-karts, and keep at least twice as many generators as water pumps.

Determine the number of items of each type that should be sent to the distribution center to maximize the companys monthly profit.

costselling pricepressure washer320500go-kart380720generator4107000water pump129270

1_ One of the decision variables has an optimal value of zero. Explain what the selling price of that item should be for this optimal solution value to change.

2) Explain whether the company should set aside additional budget money beyond the $170,000 allocated to the merchandise during the first month. If yes, how much do you recommend, and how much should the company expect its monthly profit to increase as a result? 3) Explain whether you recommend that the company should rent a smaller or a larger warehouse. In any case, indicate the size of your recommended warehouse in square feet, and determine how much this change will contribute to the monthly profit.