quantitative bus week 4

Case Analysis 2

A large sporting goods store is placing an order for bicycles with its supplier. Four models can be ordered:

the adult Open Trail, the adult Cityscape, the girl's Sea Sprite, and the boy's Trail Blazer. It is assumed

that every bike ordered will be sold, and their profits, respectively, are 40, 28, 25, and 21. The LP model

should maximize profit. There are several conditions that the store needs to worry about. One of these is

space to hold the inventory. An adult's bike needs two feet, but a child's bike needs only one foot. The

store has 500 feet of space. There are 1200 hours of assembly time available. The child's bike need 4

hours of assembly time; the Open Trail needs 5 hours and the Cityscape needs 7 hours. The store would

like to place an order for at least 275 bikes.

a. Formulate a linear programming model as shown at the bottom of page 254, assume

X1=the number of the adult Open Train bike ordered

X2=the number of the adult Cityscape bike ordered

X3=the number of the girl’s Sea Sprite bike ordered

X4=the number of the boy’s Trail Blazer bike ordered

b. Solve your linear programming model in part a, using EXCEL Solver, and interpret the results. In other words, how many of each kind of bike should be ordered and what will be the maximum profit?

Explain using at least 70 words.

c. What would be the optimal (maximum) profit be if the store had 120 more feet of storage space? Explain using at least 70 words. Justify your answer based on your sensitivity report.

d. Which resource should the company work ton increase, inventory space or assembly time? Explain using at least 70 words. Justify your answer based on your sensitivity report.

e. Discuss biblical principles that could be related to decision making process in a real-world, using at

least 100 words. (This is an open-ended question, and there is no definite answer)