A used car dealership has just opened in town. The facilities allow it to have up to 20 cars on the lot, including trade-ins and
A used car dealership has just opened in town. The facilities allow it to have up to 20 cars on the lot, including trade-ins and cars for sale. This dealership focuses on a very specific segment: very expensive classic cars. The owner knows that average prices fluctuate throughout the year as customers change preferences with the seasons. The expected average value per car is forecasted below. The owner looks for these rare classics all over the world. His plan is to spend some months buying cars around the world and other months selling them back home. Based on previous experience, he won't be able to buy more than 10 cars nor sell more than 15 during any given month. The dealer starts with an inventory of 20 cars (full lot), but his plan is to get out of this business at the end of the year (all cars must be sold by them). Using Excel Solver, find the expected maximum profit and optimal strategy.
a. What is the final profit | |
b.When should he buy cars | |
c.How many cars should he buy per month | |
d.When should he sell cars | |
e.How many cars should he sell per month | |
Month (t) | Car Prices |
January | 100,000 |
February | 98,000 |
March | 132,000 |
April | 150,000 |
May | 160,000 |
June | 185,000 |
July | 190,000 |
August | 190,000 |
September | 175,000 |
October | 130,000 |
November | 122,000 |
December | 115,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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