Web Mercantile

# Web Mercantile - At first glance the Web Mercantile(WM...

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At first glance, the Web Mercantile (WM) problem can be bewildering, but it is much less confusing Let's temporarily ignore months 3-5 and think about leases to meet month 1 & 2 requirements. Three possibilities are: # 1 Month 1 - lease 30,000 sq ft for a duration of 2 months. # 2 Month 1 - lease 20,000 sq ft for a duration of 2 months and 10,000 sq ft for a dura # 3 Month 1 - lease 30,000 sq ft for a duration of 1 month. Month 2 - lease 20,000 sq Each alternative has specific costs and consequences. For example, # 1 costs \$3,000,000 and results in 10,000 sq ft vacant in month 2. # 2 costs \$2,650,000 and leaves no space vacant. # 3 costs \$3,250,000 and leaves no space vacant. So the decision variables are the exact leases - size and duration - to be purchased at each opportunity, that is, at the beginning of each month. One (there are others) systematic way to represent these options follows:

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## This note was uploaded on 04/21/2009 for the course BUS 338W-1 taught by Professor White during the Winter '09 term at University of Michigan-Dearborn.

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Web Mercantile - At first glance the Web Mercantile(WM...

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