Question
8-8 (Automobile leasing problem) Sundown Rent-a-Car, a large automobile rental agency operating in the Midwest, is preparing a leasing strategy for the next six months.
8-8 (Automobile leasing problem) Sundown Rent-a-Car, a large automobile rental agency operating in the Midwest, is preparing a leasing strategy for the next six months. Sundown leases cars from an automobile manufacturer and then rents them to the public on a daily basis. A forecast of the demand for Sundown's cars in the next six months follows:
Cars may be leased from the manufacturer for either three, four, or five months. These are leased on the first day of the month and are returned on the last day of the month. Every six months the automobile manufacturer is notified by Sundown about the number of cars needed during the next six months. The automobile manufacturer has stipulated that at least 50% of the cars leased during a six-month period must be on the five-month lease. The cost per month is $420 for the three-month lease, $400 for the four-month lease, and $370 for the five-month lease.
Currently, Sundown has 390 cars. The lease on 120 cars expires at the end of March. The lease on another 140 cars expires at the end of April, and the lease on the rest of these expires at the end of May.
Use LP to determine how many cars should be leased in each month on each type of lease to minimize the cost of leasing over the six-month period. How many cars are left at the end of August?
Demand for each month:
March 420
April 400
May 430
June 460
July 470
August 440
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started