Leaving Spaces is a furniture retailer that buys its items from different suppliers. They should purchase a
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Question:
Leaving Spaces is a furniture retailer that buys its items from different suppliers. They should purchase a mattress from a manufacturer at$600per each. The holding cost for each mattress is only1%of the price. Assuming an ordering cost of$2000and an estimated yearly demand of 1500
(a) find the optimal order quantity that minimizes inventory costs for Leaving Spaces and,
(b) how much the total annual cost of Leaving Spaces changes if they order 200 mattresses every time instead of optimal number?
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