MERCHANDISING. Office Warehouse has been downsizing its operations. It is in the process of moving to a much smaller location and reducing the number of different computer products it carries. Coming under scrutiny are 10 products Office Warehouse has carried for the past year. For each of these products, Office Warehouse has estimated the floor space required for effective display, the capital required to restock if the product line is retained, and the short-term loss that Office Warehouse will incur if the corresponding product is eliminated (through liquidation sales, etc.).
Office Warehouse wishes to minimize the loss due to liquidation of product lines subject to the following conditions:
• At least four of these product lines will be eliminated.
• The remaining products will occupy no more than 600 square feet of floor space.
• If one product line from a particular manufacturer is eliminated, all products from that manufacturer will be eliminated. (This affects Compaq, Packard Bell, and Apple.)
• At least two computer models (notebook, PC, or Macintosh), at least one monitor model, and at least one printer model will continue to be carried by Office Warehouse.
• At most $75,000 is to be spent on restocking product lines
. • If the Toshiba notebook computer is retained, the Epson line of printers will also be retained.