INVENTORY MANAGEMENT EXERCISE

Solve thoroughly the following exercise. A fruit stand stocks three products - apples, cantaloupes, and watermelons. The demands (for a season), unit costs, ordering costs, and size of the three items are: Product Demand T Unit costs Ordering costs Size (units of space) Apples Cantaloupes Watermelons 2500 1000 600 0.50 1.00 3.50 25.00 20.00 30.00 10 Assume an inventory carrying cost rate of 10 percent per season. Consider that the stand has only 2000 units of space. Find: 1. (60 pts.) Using a Lagrange multiplier approach, determine the batch sizes for the constrained problem Answer 2 (40 pts.) What is the value of the Lagrange multiplier obtained in the previous question? Answer Solve thoroughly the following exercise. A fruit stand stocks three products - apples, cantaloupes, and watermelons. The demands (for a season), unit costs, ordering costs, and size of the three items are: Product Demand T Unit costs Ordering costs Size (units of space) Apples Cantaloupes Watermelons 2500 1000 600 0.50 1.00 3.50 25.00 20.00 30.00 10 Assume an inventory carrying cost rate of 10 percent per season. Consider that the stand has only 2000 units of space. Find: 1. (60 pts.) Using a Lagrange multiplier approach, determine the batch sizes for the constrained problem Answer 2 (40 pts.) What is the value of the Lagrange multiplier obtained in the previous