The following considerations also apply: There is an administrative cost of $5000 associated with setting up

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The following considerations also apply:

■ There is an administrative cost of $5000 associated with setting up a supplier’s account. For example, if Motorola uses three suppliers, it incurs an administrative cost of $15,000.

■ To ensure reliability, no supplier can supply more than 80% of Motorola’s demand for any product.

■ A supplier must supply an integer amount of each product it supplies.

Develop a linear integer model to help Motorola minimize the sum of its purchase and administrative costs.

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Practical Management Science, Revised

ISBN: 9781118373439

3rd Edition

Authors: Wayne L Winston, S. Christian Albright

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