Question

For each delivery of component parts, a firm has an ordering cost of $400 per shipment. Carrying costs (storage, insurance, etc. ) are $16 per unit. Sales are expected to be uniform over the course of the year and are expected to reach 5000 units. The firm should place x = ________________ orders per year for y = _______________ units each to minimize its overall ordering and inventory costs.

where x is the number of shipments and y is the number of units per shipment.

Answer 1

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