Question

Answer the following questions:

*The printshop at State University purchases from a vendor sweatshirts emblazoned with the school name and logo. The vendor sells the sweatshirts to the printshop for $38 a piece. The cost to the printshop for placing an order is $120, and the carrying cost is 25% of the purchase price. The printshop manager estimates that 1,700 sweatshirts will be sold during the year. The vendor has offered the printshop the following volume discount schedule:


Order Size Discount % Price Carrying Cost
1-299 0%
300-499 2%
500-799 4%
800+ 5%

*The printshop manager wants to determine the printshop's optimal order quantity, given the foregoing quantity discount information.

1. Determine carrying cost as a percentage of purchase price.
2. Calculate EOQ for each discount price
3. Calculate TC for each EOQ
4. What is the printshop's optimal order quantity?

*A canning company produces two sizes of cans—regular and large. The cans are produced in 10,000-can lots. The cans are processed through a stamping operation and a coating operation. The company has 30 days available for both stamping and coating. A lot of regular-size cans requires 2 days to stamp and 4 days to coat. Whereas a lot of large cans requires 4 days to stamp and 2 days to coat. A lot of regular-size cans earns $800 profit, and a lot of large-size cans earns $900 profit. In order to fulfill its obligations under a shipping contract, the company must produce at least 9 lots. The company wants to determine the number of lots to produce of each size can (x1 and x2) in order to maximize profit.
 
1. Write out the Linear Programming Model
2. Set up a chart with all the model parameters
3. Create the Solver problem and highlight the appropriate cells as demonstrated in class.
4. Use Solver and Solver the problem. Create the Sensitivity Report.
5. Change the name of the Sensitivity Report to Prob # Sensitivity Report.

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