Determining Order Size

nuwhax
timer Asked: Apr 29th, 2016

Question Description

An electronic retail chain wishes to minimize its ordering costs for a particularly popular model of laptop computer. This retail has a line credit to finance its inventory and the current holding rate is 3%. The chain estimates it can sell 400,000 units per year and it pay $500 dollars per unit. Its costs $42 dollars to place each order. How many units should it order each time?

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