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Web Mercantile sells many household products through an online catalog. The company needs substantlal warehouse space for storing its goods. Plans now are belng made
Web Mercantile sells many household products through an online catalog. The company needs substantlal warehouse space for
storing its goods. Plans now are belng made for leasing warehouse storage space over the next five months. Just how much space will
be required in each of these months is known. However, since these space requirements are quite different, It may be most
economical to lease only the amount needed each month on a monthbymonth basis. On the other hand, the additional cost for
leasing space for additional months is much less than for the first month, so It may be less expensive to lease the maximum amount
needed for the entire five months. Another option is the intermedlate approach of changing the total amount of space leased by
adding a new lease andor having an old lease explre at least once but not every month.
The space requirement and the leasing costs for the varlous leasing periods are as follows.
Click here for the Excel Data Flle
The objectlve is to minimize the total leasing cost for meeting the space requirements.
Formulate a spreadsheet model for this problem. Then use Solver to solve the model.
Determine the total cost.
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