Sueos en Teca is a small local manufacturer of wooden benches. Their line includes four types...

 

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Sueos en Teca is a small local manufacturer of wooden benches. Their line includes four types of benches that differ in size, material, finish, and color. Pertinent production data are as follows: Bench Type 1 2 3 4 Annual Demand (units) 1,000 5,000 1,0000 8,000 Set-up cost ($) 6 10 10 8 Unit ($) 10 3 5 2 Space per unit (ft) 5 1 1 1.5 The company has a small warehouse for finished benches, which has an area of 1500 ft. Each bench has a fixed location. Assume i-20 percent annually. a) Calculate the optimal quantities to be stored. b) The manager has an offer to double the storage space, which will result in an increase of $500 in annual expenses. Should he recommend it? Explain your approach. c) Suppose that the company, in addition to the limited warehouse space, also has a budget limitation of $3,800 for investment in inventory. Calculate the optimal quantities to be stored Compare with the results of part a. Discuss your answer. Sueos en Teca is a small local manufacturer of wooden benches. Their line includes four types of benches that differ in size, material, finish, and color. Pertinent production data are as follows: Bench Type 1 2 3 4 Annual Demand (units) 1,000 5,000 1,0000 8,000 Set-up cost ($) 6 10 10 8 Unit ($) 10 3 5 2 Space per unit (ft) 5 1 1 1.5 The company has a small warehouse for finished benches, which has an area of 1500 ft. Each bench has a fixed location. Assume i-20 percent annually. a) Calculate the optimal quantities to be stored. b) The manager has an offer to double the storage space, which will result in an increase of $500 in annual expenses. Should he recommend it? Explain your approach. c) Suppose that the company, in addition to the limited warehouse space, also has a budget limitation of $3,800 for investment in inventory. Calculate the optimal quantities to be stored Compare with the results of part a. Discuss your answer.