Answered: Item Tomatoes Lettuce Zucchini Annual…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

A local outdoor vegetable stand has exactly 1,000 square feet of space to display three vegetables: tomatoes, lettuce, and zucchini. The appropriate data for these items are given in the following table. (given)

The setup cost for replenishment of the vegetables is $100 in each case, and the space consumed by each vegetable is proportional to its costs, with tomatoes requiring 0.5 square foot per pound. The annual interest rate used for computing holding costs is 25 percent. What are the optimal quantities that should be purchased of these three vegetables?

Item
Tomatoes
Lettuce
Zucchini
Annual demand
850
1,280
630
(in pounds)
Cost per pound
$0.29
$0.45
$0.25

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