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9. The Economic Order Quantity (EQQ) model is based on ordering only a single item. Suppose we allow for multiple items that are independent except
9. The Economic Order Quantity (EQQ) model is based on ordering only a single item. Suppose we allow for multiple items that are independent except for a budget restriction. Develop a model to minimize the total cost and meet a budget constraint on the total inventory value, defined by the product of the unit cost multiplied by the order quantity, summed over all items. Apply your model to the following data by implementing it on a spreadsheet and solving the model with Solver. Interpret the sensitivity report. Item 1 Item 2 Item 3 Annual demand 2,000 2,000 1,000 Item cost $100 $50 $80 Order cost $150 $135 $125 Budget limitation = $20,000 1 = 0.20
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