Costco has received the following demands for a product this year: Month 1 2 3 4 5 6 7 8 9 10 11 12

Demand 300 700 800 900 3300 200 600 900 200 300 1000 800

Suppose ordering cost (OC) is $504 and holding cost (HC) of one unit of product in a year is $3.Use mixed integer linear programming to solve the problem regarding the monthly demand. Suppose that holding

cost is applied to the ending inventory.

Develop the mathematical model in the Word document.

Solve the problem in Excel

Develop a plan in the Word document and explain when and how many products should be ordered in order to

minimise the total cost.

Recalculate the optimal value of objective function (total cost with the new assumption that the holding cost is

applied to the average inventory (not ending inventory). form decision variable , objective function and constraint