- A company will begin stocking remote control devices. Expected monthly demand is 800 units. The controllers can be purchased from either supplier A or supplier B. Their price lists are as follows:
|
Supplier A |
|
|
Quantity |
Unit Price* |
|
1 – 199 |
$14.00 |
|
200 – 499 |
$13.80 |
|
500 – 1000 |
$13.60 |
|
Supplier B |
|
|
Quantity |
Unit Price* |
|
1 – 149 |
$14.10 |
|
150 – 349 |
$13.90 |
|
350 – 600 |
$13.70 |
The fixed ordering cost for Supplier A is $400 and has a capacity to supply up to 1000 units per month. The fixed ordering cost for Supplier B is $300 an has a capacity to supply up to 600 units.
The objective is to minimize the total cost of purchasing (fixed plus variable costs).
- Formulate this problem as a linear integer programming problem and find an optimal solution using Excel solver. (Assume an all-units discount offering from the suppliers)
- Formulate this problem as a linear integer programming problem and find an optimal solution using Excel solver. (Assume a graduated discount offering from the suppliers)
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