# solution

1. 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 â€“ 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).

1. 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)
2. 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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