Question: Each year, the Smalltown Optometry Clinic sells 10,000 frames for eyeglasses. The clinic orders frames from a regional supplier, which charges $15 per frame. Each

Each year, the Smalltown Optometry Clinic sells

Each year, the Smalltown Optometry Clinic sells 10,000 frames for eyeglasses. The clinic orders frames from a regional supplier, which charges $15 per frame. Each order incurs an ordering cost of $50. Smalltown Optometry believes that the demand for frames can be backlogged and that the cost of being short one frame for one year is $15 (because of loss of future business). The annual holding cost for inventory is $0.3 per dollar value of inventory. (a) What is the optimal order quantity? (b) What is the maximum shortage that will occur? (c) What is the maximum inventory level that will occur

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