Your friend has a fabulous recipe for salsa, and he wants to start packing it up and selling it. He can rent the back room of a
local restaurant any time he wants, complete with their equipment, for $100 per time. It costs him $2 a jar for the materials (ingredients for the salsa, jars, labels, cartons) and labor (you and a couple of friends of his) for each jar he makes. He can sell 12,000 jars of salsa each year (I told you it was a fabulous recipe!), with a constant demand (that is, it's not seasonal; it doesn't vary from week to week or month to month). It costs him $1 a year per jar to store the salsa in the warehouse he ships from. He wants to find the number of jars he should produce in each run in order to minimize his production and storage costs, assuming he'll produce 12,000 jars of salsa each year. Your friend wants to find the number of jars he should produce in each run in order to minimize his production and storage costs, assuming he'll produce 12,000 jars of salsa each year.
Each run costs him 100 dollars he sells 12000 every year, so 12000*2=24000 and also, each jar cost 1 dollar to store, so an additional 12000 12000+24000=36000
so he wil defenitely spend 36000 on the salsa alone the only dependent variable is how much he spends on the rent he can minimize this by making all 12000 jars in 1 run (wow!) resulting in a cost of $36100 that is minimum cost you could just do it in your dorm room or your parents' house
