Find the optimal order quantities for the joint order

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Reference no: EM131079600

A retailer supplies two of his products (A and B) from a single supplier. He thinks that rather than ordering these two products separately (in this case he would pay the fixed cost S for two products separately) he might follow a combined strategy in which he places the orders for 2 products at the same time. This way he would only pay S for the order of two joint products. The information regarding annual demand and unit costs are given in the following table:

Product	Annual demand (D)	Unit Cost (c)
A	2000	$8
B	4500	$2

Find the optimal order quantities for the joint order policy and calculate the total cost of this policy

Reference no: EM131079600

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