Reference no: EM1374178
Q. The I. Kruger Paint and Wallpaper Store is a large retail distributor of the Super trex brand of vinyl wall coverings. Kruger will enhance its citywide image in Miami if it can outsell other local stores in total number of rolls of Super trex next year. It is able to estimate the demand function as follows.
Number of rolls of Super trex sold= 20xDollars spent on advertising + 6.8xDollars spent on in-store displays + 12xDollars invested in on-hand wallpaper inventory - 65,000xPercentage mark up taken above wholesale cost of a roll.
The store budgets a total of $17,000 for advertising, in-store displays and on-hand inventory of Super trex for next year. It decides it must spend at least $3,000 on advertising; in addition, at least 5% of the amount invested in on-hand inventory should be devoted to displays. Mark ups on Super trex seen at other local stores range from 20% to 45%. Kruger decides that its mark-up had best be in this range as well.
a. Formulate as an LP problem.
b. Solve the problem with using QM for Windows.
c. Illustrate what is the difficulty with answer?
d. Illustrate what constraint would you add?