Question: Please, I need a step-by-step answer for every question ( a,b,c,d ): Mega-Mart, a discount store chain, is to build a new store in Rock
Please, I need a step-by-step answer for every question (a,b,c,d):
Mega-Mart, a discount store chain, is to build a new store in Rock Springs. The parcel of land the company has purchased is large enough to accommodate a store with 140,000 square feet of floor space. Based on marketing and demographic surveys of the area and historical data from its other stores, Mega-Mart estimates its annual profit per square foot for each of the store's departments to be as shown in the table on the following page.
| Department | Profit per ft.2 |
| Men's clothing | $4.25 |
| Women's clothing | 5.10 |
| Children's clothing | 4.50 |
| Toys | 5.20 |
| Housewares | 4.10 |
| Electronics | 4.90 |
| Auto supplies | 3.80 |
Each department must have at least 15,000 square feet of floor space, and no department can have more than 20% of the total retail floor space. Men's, women's, and children's clothing plus housewares keep all their stock on the retail floor; however, toys, electronics, and auto supplies keep some items (such as bicycles, televisions, and tires) in inventory. Thus, 10% of the total retail floor space devoted to these three departments must be set aside outside the retail area for stocking inventory. Mega-Mart wants to know the floor space that should be devoted to each department in order to maximize profit.
a. Formulate a linear programming model for this problem.
b. Solve this model by using the computer. Mega-Mart is considering purchasing a parcel of land adjacent to the current site on which it plans to build its store. The cost of the parcel is $190,000, and it would enable Mega-Mart to increase the size of its store to 160,000 square feet.
c. Discuss whether Mega-Mart should purchase the land and increase the planned size of the store.
d. Suppose that the profit per square foot will decline in all departments by 20% if the store size increases to 160,000 square feet. (If the stock does not turn over as fast, increasing inventory costs will reduce profit.) How might this affect Mega-Mart's decision in (c)?
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