Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. Orrin Sage is opening a bicycle shop and considering his initial order of bicycles for the coming season. Orrin is considering two different suppliers

image text in transcribed 4. Orrin Sage is opening a bicycle shop and considering his initial order of bicycles for the coming season. Orrin is considering two different suppliers of bikesHoosier Bikes and Albatross Imports. With either supplier, there will be costs associated with setting up the contract. He estimates this cost of being $5,000 with Hoosier Bikes and $6,000 with Albatross Imports. His entire budget for purchasing bikes is $50,000 (including cost of contracts). a. Formulate a linear program to help him maximize his profits. Use the following decision variables: fori=H,A,andj=K,M,C,R, xij : number bikes purchased from supplier i of type j; yi binary variable of supplier i; i.e., yi=1 if Orrin signs a contract with Supplier i;yi=0, otherwise. b. Albatross Imports has a special incentive for retailers who sign up to only sell their bikes. If Orrin buys only from them, they will give a rebate of $3,000 at the end of the year on his order. Modify your model from part a. (You may need to add a variable.) c. Hoosier Bikes are in great demand and the supply is limited for retailers who are not designated as a Hoosier Bikes' Exclusive Dealer. For this year Hoosier Bikes has a limit of 75 of each type of bike for retailers who are not Exclusive Dealers. If Orrin signs up be a Hoosier Bikes' Exclusive Dealer and only buy bikes from them (and none from Albatross), they will supply all of his demand. Modify your model from part a

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Business Management And General Management

Authors: Don Hellreigel; John Slocum; Susan Jackson

2nd Edition

0190748850, 978-0190748852

More Books

Students also viewed these General Management questions