10. A manufacturer stocks four items, each requiring a certain amount of floor space in the warehouse. A limited number of square feet of floor space is available to store the total quantity of the four products that are ordered. Develop a model based on the economic order quantity to minimize the total cost and meet the floor space limitation. Apply your model to the following data by implementing it on a spreadsheet and solving the model with Solver. Interpret the Sensitivity report.

Assume that the carrying charge rate is 20% and that 500 square feet of floor space are available for storage.

Item 1 Item 2 Item 3 Item 4 Annual demand 5000 1000 7500 6000 Ordering cost/order $75 $50 $50 $75 Unit cost $100 $300 $500 $200 Floor space/unit (square feet) 2 1.5 3 1