A local office supply store has an annual demand for 20,000 cases of photocopier paper per year?
samantah asked:
It costs $3 per
year to store a case of photocopier paper, and it costs $40 to place an order. Find the optimum number of cases
of photocopier paper per order.
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It costs $3 per
year to store a case of photocopier paper, and it costs $40 to place an order. Find the optimum number of cases
of photocopier paper per order.
October 23rd, 2009 at 4:13 am
you are supposed to find the best amount of cases per order to minimize costs so
C= yearly carrying costs * (avg # of cases) + cost of order * (# of orders)
for the above, you multiply by carrying costs by avg # of cases because the the stock of cases of paper in the store is not a constant value.
in order to minimize costs, you must take the derivative of the function and set it equal to zero and find x, which is just finding the minimum of a function.
my sis needed help on this exact problem good luck
check source page 27 for a similar example if you still dont understand abc