Question

M. cotteleer electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. one of the components has an annual demand of 260 ​units, and this is constant throughout the year. carrying cost is estimated to be ​$0.25 per unit per​ year, and the ordering​ (setup) cost is ​$21 per order. ​a) to minimize​ cost, how many units should be ordered each time an order is​ placed? nothing units ​(round your response to two decimal​ places).

Answer 1

It depends on how many they want to order at a time if they do 4 orders a year at ordering 65 units each order they will spend $37.25 each order and $149.00 a year or they could buy they whole amount that they are needing for the year say the whole 260 units in one order and spend $86 on one order