The biggest inventory problem at the Barko facility is the storage of boom sections for their various Knuckleboom models. There are two types of boom sections: short and long. The following table outlines the demand in the next 5 months and the projected purchase price for each type of boom section.

Demand

May

June

July

August

September

Short booms

35

30

20

29

16

Long booms

37

11

16

33

10

Storage capacity

50

46

46

42

42

Purchase price

Short booms

$850

$800

$900

$950

$900

Long booms

$1,050

$1,100

$1,200

$1,200

$1,150

Due to the current storage rack system, each type of boom consumes the same amount of storage capacity and they can store up to 35. The carrying cost is 2.5% of the purchase price for that month. Currently there are 15 short booms and 18 long booms on hand. They can order up to 40 of each type each month. Create an Excel model to determine the optimum ordering strategy.

The biggest inventory problem at the Barko facility is the storage of boom sections for their various Knuckleboom models. There are two types of boom sections: short and long. The following table outlines the demand in the next 5 months and the projected purchase price for each type of boom section. DemandMayJuneJulyAugustSeptemberShort booms3530202916Long booms3711163310Storage capacity5046464242Purchase priceShort booms$850$800$900$950$900Long booms$1,050$1,100$1,200$1,200$1,150Due to the current storage rack system, each type of boom consumes the same amount of storage capacity and they can store up to 35. The carrying cost is 2.5% of the purchase price for that month. Currently there are 15 short booms and 18 long booms on hand. They can order up to 40 of each type each month. Create an Excel model to determine the optimum ordering strategy.