STAR SOYBEANS Star Soybeans buys and sells soybeans from *

June 8, 2016

Question
STAR SOYBEANS

Star Soybeans buys and sells soybeans from its office in Decatur, Georgia. It provides storage for its soybeans in a warehouse leased. Star estimates that the market would allow purchases of up to 1000 tons a month and sales of up to 2000 tons a month at maximum. Currently it estimates that it will have 470 tons of in storage at the beginning of January. The terms of the lease are the inventory costs will be \$10 per ton of average monthly inventory (average of beginning and ending inventory) and Star is entitled to have up to 4000 tons in storage at the end of each month.

Table 1 shows the estimates Star has made for the market price in \$/ton in the next twelve months.

Table 1. Estimated market price for sale or purchase in \$ per ton

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

\$110

\$125

\$140

\$160

\$165

\$180

\$190

\$175

\$155

\$135

\$145

\$160

Create a Solver-based spreadsheet modelto determine how many tons of soybeans should be purchased or sold each month in order to maximize profits and solve the model.