Wolverine Electronics sells five different televisions with a different demand for each product. The holding cost for each TV is 10% of the item value. Wolverine Electronics has only 1300 m3 of capacity available to store these TVs. They also have a very limited budget to hold the inventory such that they would like to keep the cost to hold TVs in inventory for the month to under $2500.

a) In order to minimize total inventory cost with this budget, how many of each TV should they order each time they place an order?

b) How much should they have budgeted for holding costs in order to minimize total inventory cost? What would the ordering quantities be with this budget?

c) How much would the inventory cost change? Why do you think this is?

Inventory Solver Assignment Storage Storage Ordering space Space per Demand cost per available Inventory Holding Item Value unit (m3) per month Budget per month $2,500 order (m3) $75 $1,500 $2,000 TV 1 4.4 200 1300 TV 2 8.5 325 $50 TV 3 $1,300 12.6 400 $60 $1,750 $2,500 TV 4 6.4 300 $35 TV 5 9.5 150 $80