The monthly demands (in units) estimated for October 2022 to June 2023 are 1000, 2000, 1500,
800, 2400, 2000, 1750, 2800, and 900, respectively. The order costs (in dollars) for October 2022
to June 2023 are 2200, 1150, 2010, 2580, 2140, 2700, 2950, 1910, and 2760, respectively. For
example, if the company makes an order in February 2023, the order cost is $2140. The
inventory costs per unit per month (in dollars) for October 2022 to June 2023 are 1, 3, 3, 1, 1, 1,
4, 2, and 4, respectively.
The company would like to minimize the total cost for the rest of the fiscal year. Stockout or
backorder is not allowed.
(a) What are decision variables? Please clearly indicate what each decision variable represents.
(b) What is the objective function? Please write the objective function using the decision
variables identified in part (a).
(c) What are the constraints? Please write down each constraint using the decision variables
identified in part (a). Please also indicate the purpose of each constraint.
(d) What is the type of the mathematical model based on the answers to parts (a), (b), and (c)? In
the class, we have discussed LP, ILP, NLP, and INLP