You are a member of GDH’s procurement team. You are currently allocated to the “Infection disease diagnostics products” department. For this product line, components are sourced from a Chinese supplier and final products are assembled in Japan.

Your task is to maximize the team’s profit.

Keep the following in mind:

  • Inventory is being transferred from one period to another.
  • If not indicated differently, there is no other connection between the periods or influence on one another.
  • No backorders or backorder penalty cost, only lost sales (demand that could not be fulfilled will not be transferred into future periods) occur when your received order quantity plus your inventory are lower than the demand.

  • 1 local supplier (JPN Productions) with high production cost
  • 1 foreign supplier (BioMed Productions) with lower production cost

  • Your orders will arrive at the end of the order period.
  • The demand of each period will be covered from your inventory as far as possible.

    • Main task: Placing orders to fulfill demand (100% demand forecast accuracy) and to maximize your profit

    Key data Price
    Selling price $ 200
    Purchasing price at JPN Productions $ 100
    Purchasing price at BioMed Productions $ 85
    Inventory holding cost per period $ 5