Question

Use the Excel Solver to answer the following questions.

The owners of the appliance store want to spend up to $250,000 on buying new stock. They need to buy at least 100 of each appliance. The prices of buying appliances and the profits derived from selling them are shown in the following table, along with the floor area the devices require when stacked in the warehouse.

Appliance	Price	Profit	Area (m2)
Clothes dryer	$200	$21	1.2
Coffee machine	$300	$28	0.2
Refrigerator	$600	$46	0.9
Stereo	$800	$86	0.5
Washing machine	$300	$40	1.5

Use the Excel Solver to answer the following questions.

How many of each appliance should the store buy if they want to get the maximum profit when the appliances are sold?

2. What will the profit be and how much floor area is required in the warehouse?

Appliance	Number
Clothes dryer
Coffee machine
Refrigerator
Stereo
Washing machine

Maximum profit

Floor area (m2)

Hint: Similar to the lecture examples (e.g., Product Mix), first you need to determine what are:

• Objective function
• Decision variables
• Constraints

Then you need to find the relationship (sort of mathematical formulation) between your decision variables and objective function. Accordingly, you can use Solver.

Answer 1

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