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A warehouse serves two types of customers ¬¦ lease-ahead customers and spot customers ¬¦ the lease-ahead customers will book one month in advance, but will only be willing to pay $1.75 per ft2





WAREHOUSING HOMEWORK


Dr. James C. Dumville



1.        Warehouses I:


A warehouse serves two types of customers … lease-ahead customers and spot customers … the lease-ahead customers will book one month in advance, but will only be willing to pay $1.75 per ft2 … the spot customers wish to wait until the last minute, but will be willing to pay more for the space … $4.25 per ft2 … how much space do we hold back and set aside for the spot market customers? … assuming that the demand for the spot market for the next month will be normally distributed with a mean of 4,000 ft2 and a standard deviation of 750 ft2.


2.        Warehouses II:


Same problem as the above, except that the spot market estimate has jumped to $6.50 per ft2.


3.        Warehouses III:


A warehouse serves two types of customers … lease-ahead customers and spot customers … the lease-ahead customers will book one month in advance, but will only be willing to pay $2.25 per ft2 … the spot customers wish to wait until the last minute, but will be willing to pay more for the space … $5.25 per ft2 … how much space do we hold back and set aside for the spot market customers? … assuming that the demand for the spot market for the next month will be normally distributed with a mean of 3,500 ft2 and a standard deviation of 950 ft2.


4.        Warehouses IV:


Same problem as the above, except that the spot market estimate has jumped to $8.00 per ft2.



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