You have pre paid contracts with local boutique pet

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Unformatted text preview: r quantity obtained in step 2 or 3 that gives this minimum cost. IOE 202: Operations Modeling, Fall 2009 Page 15 Space Another inventory management problem1 • You are the Michigan distributor of Nature’s Peak, a high-end brand of frozen dog food. You have (pre-paid) contracts with local “boutique” pet stores to deliver, in each of the next 4 months, respectively, 50, 65, 100, and 70 lb of food, and these orders must be filled on time. • You obtain the food from the manufacturer at wholesale prices which vary month to month. In the next four months, unit prices are $5, $8, $4, and $7 per pound, respectively, and you can buy at most 80 lb each month. • Food needs to be delivered to the stores at the end of each month. You place your order with the manufacturer in the beginning of each month, receive your order at the end of the month, and immediately deliver food to the local stores. • If you have food remaining after the demand has been satisfied, you can keep some of in your wearhouse at a cost of $2 per pound per...
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