The way the company can minimize the cost of meeting the demand for cars on time. Linear programming: It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.

Question

A home improvement store sells hydrangea plants during the spring planting season. The hydrangeas cost the store $15 per unit, and sell to customers for $45, but any leftovers at the end of the season are salvaged to a local landscaper for $7/unit. A competitor has advertised that it guarantees 99% of customers find the product they’re looking for in stock. The competitor’s posted price for hydrangeas is $50, and they salvage to the same local landscaper for $7/ hydrangea plant. If the competitor’s advertised service level is correct for hydrangeas and they follow an optimal stocking policy, what does it imply their cost per hydrangea is?

Answer 1

Question

Chapter 4, Problem 77P

Summary Introduction

To determine: The way the company can minimize the cost of meeting the demand for cars on time.

Linear programming:

It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.

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