IEOR150F10_SampleMidterm2

IEOR150F10_SampleMidterm2 - Department of Industrial...

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IEOR150 Production System Analysis Sampe Midterm Exam 2 Fall 2010 Name: Grade: 1. A firm imports six items from the Far East. The relevent data for the six items are provided in the following Table. Setup costs for each product amount to $2,000 per order, and holding costs are based on a 25 percent annual interest rate. Annual Cost Space per unit Item Demand per unit (square feet) DVD player 800 $200.00 12 32-inch flat screen TV 1,600 $150.00 18 Blank DVD’s (box of 50) 8,000 $30.00 3 Blank DVD’s (box of 10) 12,000 $18.00 2 Compact stereo 400 $250.00 24 Telephone 1,200 $12.50 3 (a) Suppose the firm has a sufficiently large warehouse but has only $200,000 to be invested in these items as holding costs. More precisely, the total purchasing cost of all items stored in the warehouse must be no greater than $200,000 at any moment. Find the optimal order quantities of the six items respectively to minimize the total annual holding and setup cost. 1
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space to store these items. Find the optimal order quantities of the six items respectively to minimize the total annual holding and setup cost. 2
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IEOR150F10_SampleMidterm2 - Department of Industrial...

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