What is the optimized net cost? $ b. Use SolverTable to see what happens to the decision variables and the total cost when the initial inventory varies from 0 to 1,000 in 100-unit increments. How much lower would the total cost be if the company started with 100 units in inventory, rather than none? $
During the next four months, a customer requires, respectively, 600, 800, 1,200, and 900 units of a commodity, and no backlogging is allowed (that is, the customer's requirements must be met on time). Production costs are $80, $100, $105, and $90 per unit during these months. The storage cost from one month to the next is $20 per unit (assessed on ending inventory). It is estimated that each unit on hand at the end of month 4 can be sold for $60. Assume there is no beginning inventory. Determine how to minimize the net cost incurred in meeting the demands for the next four months.
a. What is the optimized net cost?
$
b. Use SolverTable to see what happens to the decision variables and the total cost when the initial inventory varies from 0 to 1,000 in 100-unit increments. How much lower would the total cost be if the company started with 100 units in inventory, rather than none?
$
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