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BSP 340 Homework # 1 February 14, 2022 REMINDER: QUIZ 1 IS ON 21/2/2022 (21:00 Hrs On Edmodo)
BSP 340 Homework # 1 February 14, 2022 REMINDER: QUIZ 1 IS ON 21/2/2022 (21:00 Hrs On Edmodo)
Homework # 1
February 14, 2022
REMINDER: QUIZ 1 IS ON 21/2/2022 (21:00 hrs on Edmodo)
2. The demand for ice cream during the three summer months (June, July, and August) at All-
Flavors Parlor is estimated at 500,600, and 400 20-gallon cartons, respectively. Two
wholesalers, 1 and 2, supply All-Flavors with its ice cream. Although the flavors from the
either supplier can provide is 400 per month. Also, the price the two suppliers charge change
from one month to the next according to the following schedule:
To take advantage of price fluctuation, All-Flavors can purchase more than is needed for a
month and store the surplus to satisfy the demand in a later month. The cost of refrigerating
an ice-cream carton is $5 per month. It is realistic in the present situation on hand during the
month. Develop a model to determine the optimum schedule for buying ice cream from the
two suppliers.
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3. A grocery store must decide on the shelf space to be allocated to each of five types of
breakfast cereals. The maximum daily demand is 100, 85,140, 80 and 90 boxes, respectively.
The shelf space in square inches for the respective boxes is 16, 24, 18, 22, and 20. The total
available shelf space is 5000 in 2. The profit per unit is $1.10, $1.30, $1.08, $1.25, and $1.20,
respectively. Develop a model to determine the optimal space allocation for the five cereals.
4. An individual wishes to invest $5000 over the next year in two types of investment:
Investment. A yields 5% and investment B yields 8%. Market research recommends an
allocation of at least 25% in A and at most 50% in B. Moreover, investment in A should be at
least half the investment in B. Develop a model to determine the optimal allocation of the
fund to the two investments?
5. Show & Sell can advertise its products on local radio and television (TV). The advertising
budget is limited to $10,000 a month. Each minute of radio advertising costs $15 and each
minute of TV commercials $300. Show & Sell likes to advertise on radio at least twice as
much as on TV. In the meantime, it is not practical to use more than 400 minutes of radio
advertising a month. From past experience, advertising on TV is estimated to be 25 times as
effective as on radio. Develop a model to determine the optimum allocation of the budget to
radio and TV advertising.
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