In the objective function, the first term is the annual cost of goods, the second is the annual ordering cost $($Dj$/$Qj is the number of orders$),$ and the last term is the annual inventory holding cost $($Qj $/2$ is the average amount of inventory$).$

Set up a spreadsheet model for the following data:

Item $1$ Item $2$ Item $3$

Annual Demand $2,0002,0001,000$

Item Cost $($$$)1005080$

Order Cost $($$$)150135125$

Space Required $($sq$.$ feet$)502540$

W $=5,000$

i $=0\mathrm{.}2$

Solve the problem using Excel Solver. Hint: You will need to start with decision variable values that are greater than $0$ for Solver to find a solution.