Question: Problem In Problem 6 - 2 0 you helped Lila Battle determinethe optimal order quantity for number 6 screws. She had estimated that the ordering
Problem In Problem you helped Lila Battle determinethe optimal order quantity for number screws. She had estimated that the ordering cost was $ per order. At this time, though, she believes that this estimate was too low. Although she does not know the exact ordering cost, she believes that it could be as high as $ per order. How would the optimal order quantity change if the ordering cost were $ $ and $ Reference Problem : Lila Battle has determined that the annual demand for number screws is screws. Lila, who works in her brother's hardware store, is in charge of purchasing. She estimates that it costs $ every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on Furthermore, she estimates that the cost of carrying one screw in inventory for a year is onehalf of cent. Assume that the demand is constant throughout the year. a How many number screws should Lila order at a time if she wishes to minimize total inventory cost? b How many orders per year would be placed? What would the annual ordering cost bec What would the average inventory be What would the annual holding cost be Stepbystep solution ISUS
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