Can you provide solution in the Excel using Solver for the below problem ? On Mo

Question

Can you provide solution in the Excel using Solver for the below problem ?

On Monday morning, you have $3000 in cash on hand. For the next seven days, the following cash requirements must be met: Monday, $5000; Tuesday, $6000; Wednesday, $9000; Thursday, $2000; Friday, $7000; Saturday, $2000; Sunday, $3000. At the beginning of each day, you must decide how much money (if any) to withdraw from the bank. It costs $10 to make a withdrawal of any size. You believe that the opportunity cost of having $1 of cash on hand for a year is $0.20. Assume that opportunity costs are incurred on each day’s ending balance ($0.20/365). Determine how much money you should withdraw from the bank during each of the next seven days.

Explanation / Answer

Cost of withdrawl $     10 Opportunity cost per $1 per year $ 0.20 Mon Tue Wed Thu Fri Sat Sun No of Withdraw 1 0 1 0 1 0 0 Beginning Cash Bal. $ 3,000 $   6,000 $       -   $    2,000 $        -   $    5,000 $    3,000 Amount Withdrawn $ 8,000 $       -   $ 11,000 $        -   $ 12,000 $        -   $        -   Cash Requirement $ 5,000 $   6,000 $   9,000 $    2,000 $    7,000 $    2,000 $    3,000 Ending cash Bal. $ 6,000 $       -   $   2,000 $        -   $    5,000 $    3,000 $        -   Total cost to withdraw $     30 ($10 x 3) Total opportunity cost $ 8.77 ($0.20 x $16,000 /365) Total Cost $ 38.77

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