# Demand for 64 oz. orange juice cartons at a local supermarket is constant at the rate of

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## Question:

Demand for 64 oz. orange juice cartons at a local supermarket is constant at the rate of 2000 cartons per month. The supermarket can purchase the 64 oz. cartons from supplier A at a price of $1.8/carton. Regardless of how many cartons the supermarket orders, supplier A charges a fixed delivery fee of $55 for every order. The holding cost for the 64 oz. carton is $1.50 per carton per year. Assuming that the supermarket is sourcing from supplier A, what is the optimal order quantity (in cartons) to minimize the total annual cost incurred by the supermarket?

**Related Book For**

## Applied Statistics In Business And Economics

ISBN: 9780073521480

4th Edition

Authors: David Doane, Lori Seward