Task:

A fish oil trading company has an inventory on plant of 0 MT of fish oil by the first day of December 2021. Sales are around 1900 MT a month on average with very little variation (see sales chart):

SALES CHART:

December January February March

1700 MT 1900 MT 1900 MT 1900 MT

On the other hand, the company has fish oil arriving that is already bought according to the following chart;

PURCHASE CHART:

December January February March

3998 MT 2780 MT 1608 MT 300 MT

The inventory Price (average) of the purchases is USD 1615/MT. Prices vary so market prices with availability to buy more fish oil in January, February and march are between USD 1740/MT USD 1840/MT.

Using ANY inventory model, we need to determinate;

1. What is the minimum volume of fish oil that the company can possibly buy in order to reach an inventory Price by the end of march of USD 1700/MT maximum and also satisfy the sales requirement?

2. What is the maximum buying Price and volume of fish oil that the company can afford without breaking the USD 1700/MT average inventory Price barrier.