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Find the optimal value A retailer of garden furniture buys different types of furniture from a supplier. Their line includes two types of small chairs
Find the optimal value
A retailer of garden furniture buys different types of furniture from a supplier. Their line includes two types of small chairs for which the related data are as follows: Chair type 1 2 Annual demand (units) 2182 1955 185 185 Ordering cost (TL) 52 47 Unit purchasing cost (TL) 1.00 0.75 Space per unit (m) The retailer has a small warehouse, and has allocated an area of 395 m for these products. Each chair has a fixed location. Assume that the annual inventory carrying cost rate is 25 percent. Calculate the unconstrained order quantities. Are these values optimal? If not, determine the optimal quantities to be stored from each chair type (Hint: I is 1.55) Step by Step Solution
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