Question: Matthew Liotines Dream Store sells beds and assorted supplies. His best- selling bed has an annual demand of 400 units. Ordering cost is $ 40;

Matthew Liotine’s Dream Store sells beds and assorted supplies. His best- selling bed has an annual demand of 400 units. Ordering cost is $ 40; holding cost is $ 5 per unit per year.

a) To minimize the total cost, how many units should be ordered each time an order is placed?

b) If the holding cost per unit was $ 6 instead of $ 5, what would be the optimal order quantity?

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