Reference no: EM13330998

Douglas Boats is a supplier of boating equipment for the states of Oregon and Washington. It sells 5000 white marine wm-4 Diesel engines every year. These engines are shipped to Douglas in a shipping container of 100 cubic feet, and Douglas boats keeps the warehouse full of these motors. The warehouse can hold 5000 cubic feet of boating supplies. Douglas estimates that ordering cost is 10 per order and the carrying cost is 10 per motor per year. Douglas boats is considering the possibility of expanding the warehouse for the motors. How much should Douglas boats expand, and how much would it be worth for the company to make the expansion? Assume demand is constant throughout the year.