Construct a discrete optimization model of the problem of minimizing the total transportation and inventory costs over the months of April and May. What is the average monthly cost in April and May if the logistics operation at Dellmar is optimized? What should be Dellmar’s production and shipping schedule?
Note 1: When you calculate the inventory cost of a distribution center for a particular month, you consider the inventory level at the end of that month as the inventory level for the whole month. For example, if the inventory level is 20000 in the beginning of April and reduces to 15000 at the end of April, then the inventory cost of the distribution center in April is 15000 × cost per unit.
Note 2: You need to first write down the optimization model (including the objective function and constraints) and then use Excel (or other software) to solve the problem. If the objective function is very long, you need to provide explanations for each component in the objective function. Also, explain each constraint. Construct a discrete optimization model of the problem of minimizing the total transportation and inventory costs over the months of April and May. What is the average monthly cost in April and May if the logistics operation at Dellmar is optimized? What should be Dellmar’s production and shipping schedule?