Question

The costs to a store for two models of Global Positioning System (GPS) receivers are $80 and $100. The $80 model yields a profit of $25 and the $100 model yields a profit of $30. Market tests and available resources determined the constraints below.

a.) The merchant estimates that the total monthly demand will not exceed 200 units.

b.) The merchant does not want to invest more than $18,000 in GPS receiver inventory.

Formulate the math model and solve it, clearly define the decision variables. What is the optimal inventory level for each model? What is the optimal profit?

Answer 1

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