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What is the consolidated optimal order quantity

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Joshua is running a pharmacy in Nigeria (where Naira is the local currency). His recent experience in the MicroMasters course motivated him to rethink how to reorder pharmaceuticals to replenish inventory. He recalls that he should consider the purchase cost, the order cost, and the holding cost. In the past, Joshua rigorously tracked these cost items. For Ibuprofen he knows that:

unit cost: c = 152 Naira/pack

demand: D = 690 packs/year

ordering cost: A = 1500 Naira/order

holding cost: r∗c = 52 Naira/pack*year

Joshua runs a second pharmacy on the other side of town. He has been ordering for each location individually from a wholesaler. He realizes that he can save some money by consolidating the two orders into one single order. The costs per pack for both pharmacies are exactly the same (use A, c and r∗c values from Part 1). The annual demand for Ibuprofen in the second pharmacy is 920 packs.

What is the consolidated optimal order quantity (in packs of Ibuprofen)? (Noted that the answer for unconsolidated one is 230.)

Round your answer to the nearest integer.

Reference no: EM132214821

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