A furniture store expects to sell 640 sofas at a steady rate next year. The manager of
Question:
A furniture store expects to sell 640 sofas at a steady rate next year. The manager of the store plans to order these sofas from the manufacturer by placing several orders of the same size spaced equally throughout the year. The ordering cost for each delivery is $160, and carrying costs, based on the average number of sofas in inventory, amount to $32 per year for one sofa.
(a) Let x be the order quantity and r the number of orders placed during the year. Find the inventory cost in terms of x and r.
(b) Find the constraint function.
(c) Determine the economic order quantity that minimizes the inventory cost, and then find the minimum inventory cost.
Step by Step Answer:
a The order cost is 160r and the carrying cost is The inventory cost C ...View the full answer
Calculus And Its Applications
ISBN: 9780134437774
14th Edition
Authors: Larry Goldstein, David Lay, David Schneider, Nakhle Asmar
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