OMGT 6613 Problem 2 (10 points) Acme Inc. sources a key component used in its product from ABC Enterprise. Based on Acme's production schedule they require the component in the following quantities over the next 6 months. Items Required 1 1,850 2 1,550 3 1,475 4 1,800 5 6 1,360 1,860 ABC ships this component in 3 standard cases with discounts offered on larger cases. Items/Case Unit Cost Case Cost Small Medium Large 50 10.00 500 100 9.50 950 250 9.00 2250 In addition to the purchase cost ABC incurs a holding cost for the inventory items left over at the end of the month of $10 per unit. The on-hand balance of the item is currently 0. A material planner for ABC is attempting to develop an ordering plan for this item that minimizes total costs. Do the following: Download the shell for this model from Canvas. Complete the descriptive model Calculate the number of items ordered by multiplying the number of cases ordered by the case size. Calculate the purchase cost by multiplying the number of cases ordered by the case cost. Calculate the carrying cost on inventory by multiplying the ending balance by $10. Formulate the decision problem as an LP relaxation (i.e. a problem without integer constraints) with the following constraints Order quantities are non-negative. Monthly ending balance is greater than or equal to 0 Solve the model and report the following Average on hand balance Total # of cases ordered by size (small, medium, large) Purchase cost, holding cost and total cost Now apply integrality restrictions by manually rounding the order quantities in each month. Work from month 1 to 6, round down when you can but make sure that a non-negative balance is maintained. (Only round non-zero items.) Report inventory, ordering and cost information from your manual solution. Now apply integrality constraints on the model and use Solver to solve the integer program. Report inventory, ordering and cost information from your solution. 2