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A California distributor of sporting equipment expects to sell 10,800 cases of tennis balls during the coming year at a steady rate. Yearly carrying costs (to be computed on the average number of cases in stock during the year) are $10 per case, and the cost of placing an order with the manufacturer is $60.
(a) Find the inventory cost incurred if the distributer orders 600 cases at a time during the year
(b) Determine the economic order quantity, that is, the order quantity that minimizes the inventory cost
Let x be the number of cases per order and r the number of orders placed per year.
Objective equation:?
Constraint equation:?
Inventory cost:?
The economic order quantity:?
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